Homelessness: A Crisis of Our Own Making - Pt. 1

Homelessness in America isn't a mystery, and it isn't inevitable. Behind the myths about who ends up on the street is a simpler and more uncomfortable answer: housing. In this first part, we define the crisis as it stands today — taking the myths apart, one by one, to show how a system this broken keeps producing the same result. 

Check out my substack page where I tackle some of the episode topics in depth and write about other issues our country and the world are facing today. https://substack.com/@ktdpodcast 

Transcript

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Welcome back to another episode of Khannecting the Dots. In the last episode, I talked about how we got here, how over the last fifty years, corporate interests destroyed the one framework this country built to ensure that the working class didn't get left behind. How every administration since Carter dismantled the safeguards that were in place, and how finally, just maybe, we're on the cusp of something better. But before we can talk about better, we need a clear understanding of where we are now, of the damage that's been wrought. And that brings us to the first arc, to the part of the damage that's hardest to look away from: homelessness. Through my work in healthcare, I've seen what living unsheltered does to people, and working with this population is what clarified those four rights I talked about, the ones I've come to believe are fundamental to every life. Housing is one of them. Not a luxury for people who can afford it, but something everyone must have People have been fighting for this for over a century. FDR, King, and this country still hasn't delivered it. And yet, what crystallized this episode for me wasn't something I saw at work. It was something that happened to my wife and me late last year. We were out one afternoon when we heard a loud screech, then a thud. We turned around and saw a man lying in the street. A car had stopped, the driver getting out, running over. The man who'd been hit was trying to get up. He looked shaken, but okay. The driver looked terrified. It was an accident. The man had been crossing the street illegally, stepped into traffic. These things happen. Traffic started backing up, people slowing down, trying to see what was going on. One driver just passing by hadn't seen what happened, rolled down his window and asked us if we knew what was going on. I told him, Someone got hit crossing the street. Looks like he'll be okay." He asked, "Was it a homeless guy?" I said, "Yeah, I think so." His response? "Good." And then he just drove off. My wife and I stared at each other in shock. We didn't say anything. What do you even say to that? I often think back on that moment. It's not just the cruelty of it, but the casualness. He didn't yell it. He wasn't angry. He just said it like it was obvious, like, of course, that's the correct response to a homeless person getting hurt. It got me thinking, where does that come from? That reflex that a homeless person suffering is good, is deserved, is one less problem on the road. Well, it comes from the top down. We've all heard politicians talk about homeless people, vilify them. The political conversation has spent years teaching us that these people are the problem, and as the crisis grows, so does the vitriol. Nowhere was that clearer than in the race to run this state. Back in April, CBS sat down individually with the candidates for California governor and asked them about homelessness. These weren't debate answers under pressure. These were prepared, considered positions on one of the state's defining crises. It was the first time I'd really heard any of them talk about it at length. But before we get to their answer, listen first to how the question was framed. How would you address the homelessness crisis in California, separate from housing affordability? I want to focus first on the folks who are struggling with mental health and addiction, the folks who are living on the street and they do not want to move into housing if provided. What do you do about that homeless population? I wanted you to hear the whole question before you hear the answers because there are a few things about how it's framed that matter. First, separating housing affordability from homelessness is like separating hunger from food. And the idea that there's a large group of people living on the street who don't want housing, that's an assumption, not an established fact Now let's turn to the answers. First, let's listen to Steve Hilton, former Fox News host and a Republican candidate. Enforce the law, get people off the streets into treatment, whether that's drug treatment, uh, mental health treatment, job training In other words, first order of business, criminalize having nowhere to go. And this wasn't a one-off answer. Two months earlier, at a debate, he laid out the whole plan. Number one, we have to stop the fraud. The fraud in the homeless system is stealing from the people who need our help. Number two, we have to enforce the law. It is illegal to camp on the streets. If local leaders won't enforce the law, as governor, I will make sure from the state level that we do. After that, we need to get people into the treatment that they need Fraud and enforcement, then treatment. And he said the same thing every time he's been asked. February, April, June, August. It hasn't changed. He wants full implementation of Prop 36, the 2024 ballot measure that increased criminal penalties for drug and theft offenses. It passed because it offered treatment as the alternative to jail, but that's not what happened. Instead of talking about housing, he attacks it head-on. His central target is Housing First, the approach of getting people into stable housing before requiring anything else of them, before sobriety, before treatment, before compliance. It began as a federal policy under the Obama administration, and California is the only state that wrote it into state law back in 2016. Hilton wants it repealed. He'd ask the legislature to do it, and if they won't, he says he'll act by executive order So I disagree with most of what he says here, but he raises two points worth listening to. The first is a federal rule called the IMD Exclusion. Since 1965, it's blocked Medicaid reimbursement for psychiatric treatment in any facility with more than 16 beds. Hilton wants California to apply for a waiver the way other states have. He's right. It's a real constraint on treatment capacity, and California should apply. The second is Assembly Bill 255, sponsored by a San Francisco Democrat. It would have let cities spend up to ten percent of their state homelessness funding on recovery housing, places where residents commit to staying sober. It passed with almost no opposition, but Newsom vetoed it last October, saying current law already allowed that spending and the bill was redundant. Except the bill's author disputed that. So did the cities, the counties, their attorneys, and the housing providers actually running these programs, none of whom believed they were already permitted to do it. When reporters asked Newsom's office to produce the guidance he was citing, his team sent a policy document the bill's own author had never seen. So a Democratic governor either got that wrong or wasn't straight about it. Either way, that's a problem. But even with those two valid points, his framing still locates the problem inside the person, not the rent, not the wage, the behavior. His Republican opponent in the primary, Chad Bianco, said the same thing without the polish So we will quit calling it homeless. This is not about homes. They don't even want homes. They're perfectly happy where they are yes, you heard that correctly. They don't even want homes His argument runs like this: Everyone on the street had a home and lost it to drugs, to alcohol, to mental illness. His deputies contact every one of their families, and every family says the same thing: "We won't take them back. They chose this." And the ones who genuinely want help, they already get it. There are systems in place. There are nonprofits, in his words, begging for people to walk through their doors. Then the reporter pushes back with the actual data gonna sort of specify homelessness and sort of the two groups. There is the group that you're talking about. There are also, we see the data, there are families who are homeless, who are, are seeking shelters. There are folks who don't necessarily have drug abuse or alcohol programs, or problems rather. There are people who don't choose to live on the street. So I hear what you're saying, but what about the other element of home- homelessness that when it comes to the sort of housing affordability crisis? So you saying that right there is my campaign. Your, that right there was my biggest campaign speech. Not only, and then now those, yes, there are those people. From the law enforcement world, we come in contact with those, too. And the reason why we know those stats is because every one of those want help, and we get them help And then he closes the door This emotional argument that you think there, there's all these people out there that, that are just living on the streets and they're forced to live on the streets and, and poor them and they, they want something else is not true The families, working people, people with no addiction at all, that's all emotional manipulation. Bianco lost his primary, and yet thousands of people cheered when he said this. He's the honest version of what Hilton says politely. And that brings us to Xavier Becerra, the Democrat advancing to November. He's the former US Secretary of Health and Human Services and former chair of the US Interagency Council on Homelessness. If anyone in this race should understand this in his bones, it's him. He opens by saying we have to do more on mental health and addiction because so many homeless people face those challenges. Then he talks about working more closely with cities and counties about the money the state already sends them, About making sure people can get to a place where they'll receive services. It's an administrative answer. Coordinate the agencies. Track the funding. Then the reporter asks him the same question she asked the others. "What about the people who refuse help?" Uh, you're, you're talking to a father. Um, I'm gonna help you, but I'm not gonna let you hurt yourself if you say you don't want help and you need help. I'm gonna help you. Uh, you know, those are Christian values. Uh, I'm gonna try to help my brother and my sister. If my brother or my sister is clearly in need, hurting, and on the streets, I'm not gonna just take their word that they don't want the help. I'm gonna help them, and we have an obligation to do that That sounds sincere. A decent man who wants to take care of people, and he's not proposing anything new. California has had involuntary holds since 1967. The state expanded it recently to cover severe substance use. We have mental health courts and drug courts. Sometimes compelling care is necessary. What he's promising, though, is that using it more will fix all of this. That's dubious at best. Two months earlier on a debate stage, he'd said something a little different First, expand emergency shelters so that we can get people off the streets. Second, reform our zoning and permitting laws so we can move faster to find the housing that we need for all Californians. Then, as a government, we must make sure that hardworking families, and this is my commitment as governor, hardworking families, you're working, you're working, but you're living on the edge. You're a paycheck away from becoming homeless. That's where I wanna step in. I wanna make sure the state says, "Hey, you're working hard. There is no reason why you should become homeless And that February version is closer to what's actually on his website. His homelessness platform commits to full enforcement of the Tenant Protection Act, the cap on rent increases, just cause eviction protections. It preserves local rent control. It calls prevention the smartest investment the state can make, and proposes a dedicated funding stream for rental assistance and eviction defense. It also says this: my administration will deliver proven housing first approaches." His opponent wants Housing First repealed, Becerra wants to deliver it. That's a real difference, and it matters. So he knows the argument. He's written it down. But read the first line of that same page. "This is not a housing crisis alone. It is a mental health crisis. People are dying on our streets because we have failed to treat it as such." That's not a slip under a leading question. That's his diagnosis in writing unprompted, and a diagnosis is a claim about cause. His plan rests on two ballot measures. Like Hilton, he wants to enforce Prop 36, which promised treatment as the alternative to jail, but appropriated nothing to build it. And Prop 1, the six point four billion dollar mental health bond, which promises thousands of treatment beds. Prop 1 at least has money behind it. But last spring, the state awarded nearly half of it and said ten projects would be open by year's end. CalMatters checked. None did. Nine were delayed, some by two years. One was canceled. So in November, a state with roughly half of the nation's unsheltered homeless population chooses between a Republican who wants to repeal the housing policy with the best track record in modern American history and a Democrat who'd keep it, but who calls this a mental health crisis and is betting on two ballot measures that have yet to deliver on their promise, in a state where building anything takes years. And go back to where this started, separate from housing affordability. Not one of them challenged that premise So here's what I'm gonna do over the next few episodes. I'm gonna show you what actually drives homelessness in America, not the story we're told, the one the data supports. I'll show you the history of how we got here and what actually works, because some places have made this problem smaller, and we know exactly how they did it. Because here's the truth. The man in the car who said, "Good," he's not a monster. He's been handed a story by politicians, by cable news, by both parties about who these people are and why they're on the street, and that story is wrong Before we get to the numbers, we need to talk about what homelessness actually is, because that question, simple as it sounds, is deeply political. In nineteen eighty-four, the Reagan administration released a report claiming that somewhere between two hundred and fifty thousand and three hundred and fifty thousand Americans were homeless. Advocates said the number was closer to two to three million. That's a huge gap. Who was right? Well, the answer depends on how you define homelessness. Reagan's definition was narrow. Two categories: people in shelters and people literally sleeping on streets or in other public places. That's it. So if you're a family that lost your apartment and you're sleeping on a friend's kitchen floor, not homeless. If you're living in a basement room, no bathroom, no kitchen, missing floorboards, not homeless. If you split up your kids to stay with different families because you couldn't find housing, not homeless. And notice who's doing the defining. Reagan didn't just cut the programs, he shrank the definition. Same playbook from last episode, different tool. If you define the problem small enough, you can justify doing nothing about it But here's the reality. Homelessness isn't a fixed state. It's fluid. People move between streets, shelters, double-up situations, inadequate housing. They bounce from couch to couch, sleep in their cars for a few nights, then find a week in a shelter, then back to the streets when the shelter fills up. They're all housing insecure. They're all one crisis away from sleeping outside. But depending on where they are on any given night, they might not count as homeless under the official definition. Today, we still have this fight. HUD uses a narrow definition, basically Reagan's. But a separate federal law, McKinney-Vento, requires schools to count differently, any child without a fixed, regular, adequate place to sleep. In the twenty-twenty three/twenty-twenty four school year, schools identified more than one point two million homeless children. HUD's count that year, about a hundred and forty-eight thousand. For this episode, I'm mostly using HUD's numbers because that's the number we most often hear. Just know it's a smaller number by design. And for years, the stricter definition was used to justify inaction. Keep the numbers small, pretend the problem is manageable, and avoid having to do anything about it. But lately, the problem has gotten so large that it's becoming impossible to ignore. So let's look at those numbers now. In twenty-twenty four, seven hundred and seventy-one thousand four hundred and eighty Americans experienced homelessness on a single night in January. That's according to the National Alliance to End Homelessness, who tracks this data annually. It comes from the HUD's point-in-time count. That was the highest number ever recorded since counting began in two thousand and seven, an eighteen percent increase from just the year before. And eighty-two percent of the communities across the country saw their homelessness populations go up. Not just a few cities, everywhere. Now, when you hear Sheriff Bianco talk about homelessness, or when you see the news coverage, you probably picture a specific image: tents, encampments, single men, maybe with addiction or mental illness. And yes, that is part of the picture. The Alliance data shows that sixty-six percent of people experiencing homelessness are individuals, about five hundred and twelve thousand people. Most of them are men, and among people sleeping outside, ninety-three percent are individuals. But here's what might surprise you. Families with children experienced the largest year-over-year increase of any group. One hundred and forty-eight thousand two hundred and thirty-eight children were homeless in twenty twenty-four. That's a thirty-three percent increase in one year, the highest annual increase across all age groups. And here's the other group of people not talked about enough: older adults. In California, according to data presented to the state's Commission on Aging this year, nearly eighty-five thousand people over fifty are homeless. Almost half of all unhoused single adults in the state are fifty or older, and many of them are experiencing homelessness for the first time in their lives. These aren't people who've been on the streets for decades. Take Steve Gaskell, sixty-one years old from Sacramento. He was delivering Grubhub orders, making just enough to cover his thirteen hundred dollar rent. Then the rent went up. He became part of the statistic. A man in his sixties, working, priced out. He eventually landed in senior affordable housing, one of the lucky few. Those units are typically full, and the waitlists are long. When he spoke at the commission hearing, here's what he said: "We're still alive, and we need a little help to maintain our dignity." Children and seniors, the fastest growing groups. And when Bianco says it's never been about homes, I want you to remember those numbers, 148,000 children, 85,000 Californians over 50, many of them homeless for the first time in their lives So far, I focus mostly on California. It's where I live, and it's home to half the nation's unsheltered homeless, but only 12% of the country's population. But this is happening across the country. Let's look at who else has been hardest hit. By raw numbers in that same HUD count, California, then New York, Florida, Washington, Texas. By rate, the share of a state's population that's homeless, the list is California, Vermont, Oregon, Hawaii, Washington, DC. Notice the pattern? Those aren't the poorest places in America. They're the most expensive. Detroit has high poverty and relatively low homelessness because housing there is cheap. San Francisco has low poverty and high homelessness because housing there is astronomical. The Government Accountability Office study what actually predicts homelessness across communities. They're finding when median rent goes up a hundred dollars, homelessness increases nine percent. Not drug use rates, not mental illness rates, not how generous the social services are. Housing costs And here's what happens to people while we argue about it. Researchers have documented what they call accelerated aging. The chronic stress exposure, untreated condition, and malnutrition All of it physically ages you. A 50-year-old living on the street can have the health profile of a housed 70-year-old. Cognitive impairment, ability loss, frailty, geriatric conditions arriving 20 years early. Thousands of people die in the streets every year, mostly not dramatically, not in headlines, quietly from pneumonia, diabetes, infections that a week of antibiotics would have cleared up. Conditions that are manageable with a roof and basic care and are lethal without them If you listen to the political conversation, you'd think you know exactly why this is happening. They're on drugs. They're mentally ill. They refuse help. They just need a job. Liberal policies attract them. None of these fully explain the crisis, and they are all designed to blame the person, not the system. Let's take them one at a time. Myth one: They just need to get a job. This is the one you hear most, and it comes from something that's been ingrained into all of us. Work has always been the American answer to poverty. You work, you earn, you pay your way. So when someone is on the street, the assumption is that something broke in that chain. They stopped working or never started. And there's a version of this that isn't cruel at all. Plenty of people genuinely believe a job is the way out, that dignity comes from work, and that what these folks need is opportunity, not handouts. But here's the problem with that thought. A landmark University of Chicago study out of the Friedman School, of all places, did something nobody had done before. They took a census of the entire US homeless population and linked it to actual IRS records. What they found: fifty-three percent of people in homeless shelters had formal employment in the same year they were homeless. More than half. Even among people sleeping outside in tents, in cars, forty percent had formal earnings. And here's what those jobs paid. For people in shelters, average annual earnings were about eight thousand dollars. The average one-bedroom apartment in America rents for about fifteen hundred a month. To afford that without spending more than a third of your income on rent, the standard definition of affordable, you'd need to earn around sixty thousand dollars a year Even more striking, as of twenty twenty-five, the federal minimum wage of seven dollars and twenty-five cents an hour puts a full-time year-round worker below the federal poverty line. The National Low Income Housing Coalition runs this math every year. Their finding? A one-bedroom apartment at fair market rent is affordable to a minimum wage worker in seven percent of American counties, and every one of them is in a state that pays above the federal minimum. Remember Steve Gaskell? He had a job. His rent became unaffordable anyways. Myth two: it's all drugs and mental health. This one is complicated. There are two versions you may hear. Bianco's "Ninety-five percent are addicts" and Becerra's "This is not a housing crisis alone. It is a mental health crisis." Now, if you go looking for numbers on this, you'll find that they're all over the place. Depending on the source, and often their agenda, you'll see anywhere from a quarter of the homeless population to three quarters have mental illness or substance use. That's not sloppy research. It's a definitional problem. The number you get depends entirely on what you decide to count. Count any mental illness or substance use, depression, anxiety, PTSD, problem drinking, and the numbers are high. In twenty twenty-four, the journal JAMA Psychiatry published a review pulling eighty-five studies of nearly fifty thousand people experiencing homelessness. It found sixty-seven percent had a current mental health disorder. Over a lifetime, seventy-seven percent. So it's clear this population is sicker than the general population, substantially so, across almost every category. But two things have to sit alongside that number. The first is that the relationship runs in both directions. Homelessness can cause these conditions. And if you sit with that for even a moment, what a day actually looks like when you're living outside, the sleep deprivation, the exposure, the constant threat, it isn't hard to see why. The research bears it out. A review of studies on unsheltered homelessness found substance use increases the longer someone is out there. Among rough sleepers studied in London, Eighty percent started using at least one additional drug after they became homeless. The street doesn't just collect sick people, it makes people sicker. The second thing is bigger most people with mental illness are housed. Depression, anxiety, PTSD, addiction, these are everywhere in American life. Millions of people have them, but they still go to work and pay rent. If mental illness is what puts you on the street, they'd all be there. Dennis Culhane at the University of Pennsylvania has studied this for decades. Most people with mental illness, he says, have a toehold in the housing market that they hang on to for dear life. When the market gets shaken, they're the ones who lose out. But here's the thing. When politicians talk about mental illness and homelessness, they're usually not talking about depression or anxiety. They're talking about serious mental illness: schizophrenia, bipolar disorder, psychosis. The image that comes to mind when you picture homelessness, someone acting erratically talking to themselves on the street. These conditions can get dramatically worse because of homelessness, but homelessness doesn't create them. So how common are they? From the same review, schizophrenia, seven percent; bipolar disorder, eight percent; psychotic disorders of any kind, fourteen percent. That's the population Bianco is describing when he talks about drug-induced psychosis and people too impaired to know that they need help. It's a minority of the people on the street. And it hasn't been growing. Between twenty nineteen and twenty twenty-five, homelessness in this country rose thirty-one percent. Over that same period, an analysis by the Kaiser Family Foundation of Federal Housing data showed that the share of homeless adults with serious mental illness or substance use disorder stayed flat. If serious mental illness were driving this crisis, that share would have climbed. It didn't. Now, that small minority is real, and they need care. Both of these men have the same answer for them: compel them into treatment. I've worked in that system. Getting someone into treatment is hard. There are waitlists. There aren't enough beds. Someone in crisis can wait days in an emergency room for placement if they're placed at all. And keeping them in treatment is harder still. Even if you can stabilize a person in the hospital, get them on a long-acting injectable so they aren't dependent on remembering a daily pill, connect them to case management team even after all of that, just one year later, holding that together can be extraordinarily difficult Not because they're unwilling, because continuity needs things a homeless person does not have. An address where the team can find you, the same clinician long enough to trust, somewhere to keep your medication, a place to sleep that won't be cleared next week. Treatment isn't an event. It's a relationship held together over years, and it comes apart for the same reason everything else does. The capacity isn't there Myth three: They refuse help. You heard this from Bianco in the clip earlier. They don't even want homes. They're perfectly happy where they are. He also said that when people do want help, getting it is easy. According to him, the help is abundant. Waiting, the only thing missing is people willing to take it. So let's follow what actually happens to someone who wants help. Start on the street. You want a shelter bed. In Los Angeles, a Stanford review of California's homelessness system found that one in four beds in the city's interim housing system went unused between twenty nineteen and twenty twenty-three at a cost of two hundred and eighteen million dollars. Not because people didn't want them, because there was no timely data on which beds were open, because the reservation system was disjointed and opaque, because geographic restrictions meant you couldn't be placed outside the zone where you already were. A quarter of the beds empty in a county with seventy thousand homeless people And when a bed is available, it often comes with rules that make it unusable. Remember, a large share of these people are working. Picture a shelter with a seven o'clock curfew when your shift ends at eleven, or one that's an hour by bus from your job. Taking that bed means losing the paycheck that's your potential way out. Then there's safety. Congregate shelters mean sleeping in a room with dozens of strangers. Theft is routine. Assaults happen. If you're a woman, LGTBQ, elderly, or disabled, the risks are higher. If you're a survivor of a previous assault, putting yourself in another dangerous situation is untenable. So yes, some people say no. In San Francisco in late twenty twenty-three, the mayor reported that sixty percent of shelter offers were refused. Except the city's own outreach team confirmed that if someone is offered a bed they can't use, they're counted as refusing, and often no bed was actually available for that person at all. That same month, four hundred and thirty-six people were on the shelter waitlist. San Francisco had more shelter beds than at any point in its history, and still more homeless people than beds. Now say you get past all of that. You get the bed. Here's what's waiting on the other side. Over the course of a year, The National Alliance to End Homelessness reports the system served more than one point one million people because people cycle in and out. Homeless for three months, housed, then back out when the next crisis hits. So the system is serving people, record numbers of them. But between twenty nineteen and twenty twenty-three, according to California State Auditor, only thirteen percent of people exited a shelter into any kind of permanent housing. You did the right thing. You got off the street, into the shelter, into the system. You're working with a case manager, waiting for a placement, and for almost nine out of ten people in that position, the opportunity never comes. That's not refusing help. That's a waiting room with no door at the end. Myth four: liberal policies attract them. This one has an appealing logic to it. If a city offers more, more shelter, more services, more spending, then more people will come to use it. And if you look at where homelessness is worst, you do see that. San Francisco, Seattle, New York, cities that spend heavily have the highest numbers of homeless in the country, so the correlation is real. The question is what's causing what? Researchers Greg Colburn and Clayton Aldern took that question seriously in their book, Homelessness Is a Housing Problem. They tested the factors people blame: mental illness, drug use, poverty, weather, and yes, the generosity of public assistance across cities nationwide, Asking which ones actually explain why some places have far more homelessness than others. What they found? Housing market conditions. The cost and availability of rental housing are by far the most powerful predictor. The other factors have some effect, but housing costs dwarf them all. As they put it, housing market conditions explain why Seattle has four times the per capita homelessness of Cincinnati, and why high-poverty cities like Detroit and Cleveland have low rates of homelessness. And notice what those places have in common. They're not the poorest cities in America. They're the ones many people want to live in because expensive cities have two things at once: big tax bases and progressive politics, so they fund services, and expensive housing, so they have homelessness. Both are features of the same kind of city. Only one of them puts people on the street. So let's talk about that one Housing costs. If you take away only one thing from this entire episode, let that be it. I know it sounds almost too simple, until you follow the money. Let's start with the finding I mentioned earlier. The Government Accountability Office looked at communities across the country and found that when median rent goes up one hundred dollars, homelessness rises nine percent. Why? Because of the other point I mentioned earlier. A lot of people are living right at the edge. From two thousand and one to two thousand and twenty-three, according to the National Alliance to End Homelessness, median rents in America increased by about twenty-three percent. Renters' median income rose only five percent. And here's what that did to the housing itself. Harvard's Joint Center for Housing Studies tracked what happened to the rental stock between twenty fourteen and twenty twenty-four. The number of apartments renting for under fourteen hundred dollars a month fell by nine point three million. The number renting for fourteen hundred dollars or more rose by eleven point eight million. The cheap apartments just disappeared, nine million of them in ten years. So where does that leave people at the bottom? Harvard found that in twenty twenty-four, twenty-two point seven million renter households were paying more than thirty percent of their income on rent. That's nearly half of all renters in this country. And over twelve million from that group were paying more than half. Twenty-two million households with barely a cushion. Twelve million with nothing at all. And then when you go looking for something cheaper in a market where there isn't any, it's impossible to find. Because that's the structural core of this. We do not have enough housing that people at the bottom can afford. The National Low Income Housing Coalition tracks this every year. They're finding there are thirty-five affordable and available rental homes for every one hundred extremely low-income renter households in America. No state has enough, not a single one. So what happens when you have one hundred families competing for thirty-five apartments? Landlords charge the maximum they can there's a specific version of this worth naming. For decades, the cheapest housing in American cities was a single room occupancy hotel, or the SRO. A room, a bed, a shared bathroom down the hall. Not stellar, but it was a roof, and a person working a low-wage job could afford it. Those buildings have been demolished, converted or priced out of existence across the country, and they disappeared at exactly the moment single-person households were growing the fastest. Two out of three homeless people in America are single individuals. The housing type built for them doesn't exist anymore Now, I said earlier that the places with the worst homelessness are the ones many people want to live in. Here's why that matters. Those places have strong job markets, good weather, opportunity, high demand, but they also have strict zoning, height limits, and organized neighborhood opposition to anything new. So supply can't respond. When you have high demand and frozen supply, you get exploding prices. And the opposition isn't random. The wealthier a neighborhood, the more effectively it blocks new housing nearby. It gets called preserving neighborhood character. What it preserves are property values. This is NIMBYism, not in my backyard, and it is thoroughly bipartisan. Progressive neighborhoods vote for affordable housing in the abstract and kill every specific project proposed down the street. Which brings us to the thing underneath all of it. Housing in this country is an asset class. For homeowners, rising prices are good news. Wealth goes up, equity to borrow against, profit at sale. Home equity is close to half the net worth of the median American homeowner. So homeowners who vote at far higher rates than renters and hold far more political power have a direct financial interest in keeping housing scarce. And this January in a cabinet meeting, the president said it out loud. Existing housing, people that own their homes, we're gonna keep them wealthy. We're gonna keep those prices up. We're not gonna destroy the value of their homes so that somebody that didn't work very hard can buy a home somebody that didn't work very hard. Remember the tax records? More than half the people in the homeless shelters had a job that same year. And then he went on to say this I don't wanna drive housing prices down. I wanna drive housing prices up for people that own their homes, and they can be assured that's what's gonna happen That's the conflict at the center of American housing. What's good for the people who own is catastrophic for the people who need, and the owners win every time Now, there's an objection to everything I've just said, and it's the one you hear most. If this is really about housing costs, what about the money spent on homelessness? Enormous amounts, billions every year at the federal, state, and local level, but the problem keeps getting worse. Steve Hilton built his entire plan on one version of the answer, that fraud in the homeless system is stealing from the people who need our help. Bianco called it a money laundering scheme. So let's take a look at it. Where does that money actually go? Is the homeless industrial complex real? And if it is, who's actually profiting? California is the clearest place to examine this because it spends the most and it's been audited the hardest. Between twenty eighteen and twenty twenty-three, the state spent twenty-four billion dollars on homelessness. Over that stretch, homelessness got worse. The state auditor examined 30 programs. It could only assess two of them for cost-effectiveness. The rest either didn't track outcomes or didn't have reliable data. Los Angeles passed Proposition Triple H in 2016, $1.2 billion to build housing for homeless people. Eight years later, 5,487 units were built at an average cost of $611,000 apiece in a county with 70,000 homeless people. So yes, there is waste. There is dysfunction. There are programs burning money without measurable results. The question is why and who's actually benefiting? To answer that, first I want you to hear something Carrie Sager said. She runs Home First, one of the largest homeless service providers in Silicon Valley. At the Commonwealth Club, someone asked her about corruption in the system. Her answer: Never attribute to corruption what is adequately explained by bureaucracy. Here's what she means. Nonprofits in this space pay worse than government jobs. Their boards are unpaid volunteers. Where exactly is the profit motive? Who's getting rich on a forty-five thousand dollar case manager salary? What Sager described is a system that's drowning. Her organization went from managing ten government contracts to twenty-two with basically the same staff. Twenty-two funding streams, each with its own reporting requirements, compliance rules, metrics. You end up spending your time on paperwork instead of with people And when a provider is doing a bad job, you can't fire them and hire someone better because no one else has capacity either. The whole system is stretched so thin there's no slack, No alternative, no way to demand quality. Now, I wanna be clear about something. Actual fraud does happen. There's a federal indictment right now alleging that a Los Angeles homeless service provider billed the system for twenty-three million dollars it wasn't entitled to. If that's true, they should be prosecuted. and you should go to prison. But hold that number up against the problem. Twenty-three million dollars does not explain seven hundred and forty-five thousand people sleeping outside tonight. So follow the actual money. The largest share of homelessness spending doesn't go to services at all. It goes to construction. That six hundred and eleven thousand dollars per unit is going to developers building permanent supportive housing one small project at a time, at retail prices, with no economies of scale, through years of permitting and financial costs. Twenty-unit buildings where the need calls for two hundred. Not to the nonprofits, not to the case managers scraping by on government contracts. And beyond the developers, look at who profits from the crisis itself. Landlords charging desperate people whatever the market will bear because a hundred families are competing for thirty-five units. That's revenue extracted directly from scarcity. The sociologist Matthew Desmond documented exactly how this works in his book Evicted, following landlords and tenants in Milwaukee's poorest neighborhoods family by family. What he found is that eviction isn't just a consequence of poverty, it's a cause of it, and the people renting to the poor weren't losing money on them, they were profiting from the desperation itself. And finally, there are the homeowners whose property values keep climbing precisely because new housing keeps getting blocked. Every city council meeting where a project dies, wealth is being protected. That wealth has a cost, and the cost is paid by the people who can't find housing. So yes, there's waste. Yes, there's dysfunction. But Hilton and Bianco are pointing at the wrong villains. It isn't the case managers or NGOs, it's the developers and landlords, but also the homeowners who block anything new from being built. They're invisible in this debate because they don't run homeless programs, so nobody thinks to look at them There's one more thing we need to discuss because something happened in 2025 that got buried in the headlines. The number of homeless went down. I've been using the 771,480 number all episode. That's the January 2024 count, the highest ever recorded. A year later, HUD counted 745,652, the first decline since 2016. That's twenty-six thousand fewer people that are homeless. Still a catastrophe, but it moved for the first time in nearly a decade in the right direction. And it wasn't luck. HUD's own report shows what successful communities did. They opened new housing. They placed people faster. They built coordinated systems to match people with available units. They expanded street outreach. But the administration didn't play up this fact. Instead, they released the report five months late, said that homelessness is up twenty-seven percent since twenty thirteen, and credited any decline to their own immigration crackdown, while Biden was still in office. And let's take a look at what's happening to those programs now. They're being dismantled. The administration has moved to cut the federal permanent housing programs and shift money away from the approach the evidence supports. The alliance estimates the proposed cuts could push at least a hundred and seventy thousand formerly homeless people back onto the streets. In Los Angeles, HUD has frozen the region's homeless agency from even applying for two hundred and forty million dollars in federal funding, money that currently keeps eleven thousand people housed. And then on August eleventh, the Secretary of Housing and Urban Development held a press conference in Los Angeles to explain why. He stood in front of a screen that read, "Cancel corruption." At one point, he reached under the podium, pulled out a brown paper bag, and emptied it. "Drug paraphernalia," he said, "being handed to homeless people with taxpayer money." Then a reporter asked him about a court ruling that had just gone against the administration. Here's his answer. One thing I will say is that we are committed to the reforms, uh, included in our twenty-twenty six CoC NOFO because the housing first model is a failed model The number came down for the first time in a decade, and the response is to take apart the very thing that brought it down So here's where all of this leaves us. The best homelessness news this country has produced in 10 years is that there are still seven hundred and forty-five thousand people with nowhere to live. And remember where this episode started. In 1984, Reagan's administration insisted the number was between two hundred and fifty thousand to three hundred and fifty thousand, a number built to be small. Even by that measure, the one designed to minimize the problem, homelessness has at least doubled since. How does that happen? How does the richest country in human history spend 40 years going backwards and end up calling a count of 745,000 homeless progress? That story has a beginning, and the way this country treats people with nowhere to live goes back a lot further than Reagan. That's for next time Thank you for listening to another episode of Khannecting the Dots. If you found this episode helpful and informative, please leave a review, share with a friend, and consider subscribing. Until next time, stay curious, stay critical, and stay connected