The Homeless Industrial Complex

This article is a must read, from the Center for American Greatness.


In his final speech from the White House in January 1961, President Dwight D. Eisenhower warned the nation that the military had joined with the arms industry and had acquired unwarranted influence over American politics. His term for this alliance was the “military industrial complex.”

Since that time, Eisenhower’s term has been co-opted by other critics of special interests pooling their resources to exercise a dangerous influence on America’s democracy; one example would be the so-called “homeless industrial complex.”

This label has been around awhile, and has bipartisan origins. In 2012 a guest editorial appeared in the liberal Washington Post entitled “Dismantling the social services industrial complex.” In it, the author explains “an odd mirror image of this huge complex has emerged in the very ‘industry’ that seeks to feed, clothe and otherwise meet the needs of the poor and vulnerable in our society. It’s a social services-industrial complex, if you will, one that could prove even more difficult to subdue than its military counterpart.”

In 2013, writing for Poverty Insights, author John Roberts asked “Is There a Homeless Industrial Complex That Perpetuates Homelessness?” And in January 2017, a former homeless activist published in the ultra-liberal Huffington Post an article entitled “The Homeless Industrial Complex Problem.”

The alliance of special interests that constitutes what has now become the Homeless Industrial Complex are government bureaucracies, homeless advocacy groups operating through nonprofit entities, and large government contractors, especially construction companies and land development firms.

Here’s how the process works: Developers accept public money to build projects to house the homeless—either “bridge housing,” or “permanent supportive housing.” Cities and counties collect building fees and hire bureaucrats for oversight. The projects are then handed off to nonprofits with long term contracts to run them.

That may not sound so bad, but the problem is the price tag. Developers don’t just build housing projects, they build ridiculously overpriced, overbuilt housing projects. Cities and counties create massive bureaucracies. The nonprofits don’t just run these projects—the actual people staffing these shelters aren’t overpaid—they operate huge bureaucratic empires with overhead, marketing budgets, and executive salaries that do nothing for the homeless.

None of these dynamics are terribly unique. Government funded programs are rarely considered bargains. And despite prodigious waste, America’s military is nonetheless the most fearsome in the world. Similarly, despite mismanaging literally billions in proceeds from bonds and taxes collected to help the homeless, in absolute numbers America’s population of homeless may actually have declined over the past 10 years.

How Many Homeless Are There in America?
This surprises a lot of people, but there’s a lot more to that story. According to the U.S. Department of Housing and Urban Development (HUD), in 2007 there were 647,000 homeless people in the United States, but by the time the most recent count was released in 2018, that number had declined to 543,000.

Why, if so much money is being wasted, and the homeless crisis seems to be more acute than ever, are the absolute numbers of homeless actually falling? First of all, the numbers may be incorrect. These counts may be grossly understated.

CityLab in March published an illuminating critique of how HUD’s “point-in-time” homeless count may be understating the numbers. Author Alastair Boone participated in an official count, covering a section of Oakland, California, in the early hours of January 30 this year. HUD requires cities and counties to complete the count on this day every two years in order to receive federal funding for homeless programs. But canvassing the streets of any city during the pre-dawn hours during the coldest month of the year (even in California) is bound to miss a lot of people.

“The count is during the winter early in the morning, when it’s harder to actually find folks because they’re seeking some sort of refuge,” Boone writes. “They want to stay out of sight in general for their own safety.”

Knowing just how many Americans are homeless is further complicated by competing definitions of homelessness. The National Center for Educational Statistics (NCES) claimed in a 2015 report that 1.3 million K-12 students were homeless in that year. But NCES defines the homeless as not only those who are unsheltered or in homeless shelters, but those sharing housing due to loss of their own home, or living in hotels or motels.

Even in California, a state where homelessness is now a crisis célèbre for state legislators in Sacramento, and a cautionary horror story for conservative critics of California politics, at first glance, the overall numbers suggest the problem is overblown. On the map depicted below, using HUD data, the state by state homeless trend is shown for the 10 years from 2007 to 2017. California’s total homeless population actually dropped by 3.4 percent.

But reports from around the state dispute the HUD assessment. According to a June 2019 article published in the New York Times, “in Alameda County, the number of homeless residents jumped 43 percent over the past two years. In Orange County, that number was 42 percent. Kern County volunteers surveying the region’s homeless population found a 50 percent increase over 2018. San Francisco notched a 17 percent increase since 2017. When Los Angeles officials released the results of their most recent count, homelessness was up by 12 percent over last year in the county and up 16 percent in the City of Los Angeles.”

Nobody seems to know whether these flaws and ambiguities in how the homeless are counted mean that the crisis is in fact worse now than ever, despite official numbers showing a decline. But total numbers alone don’t tell the whole story. How the homeless are treated, and where the homeless are concentrated, has changed a great deal in the past ten years. This is the real reason the homeless crisis today is worse than ever.

The next map, below, using data from the United States Interagency Council on Homelessness, shows 2018 estimates of the total homeless population by state. Viewed in this context, the states where homelessness increased dramatically over the past ten years, North Dakota, South Dakota, and Wyoming, nonetheless confront a relatively insignificant challenge. As of 2018, the estimated homeless population of all three of those states combined totaled only 2,340 people.

Most homeless, on the other hand, are concentrated in states that share one or more of three characteristics; a mild winter climate, large urban centers, and liberal politics. New York, with the nation’s second largest homeless population, fulfills two of those three criteria. Sunny California, in first place with an estimated homeless population exceeding 129,000 in 2018, fulfills all three.

Whether the numbers of homeless people are up or down in California is only half the story. How California’s homelessness has worsened over the past ten years represents a qualitative change. The mismanagement of California’s homeless can be attributed to the Homeless Industrial Complex, but other policy failures are also to blame. All in all, California’s response to homelessness is a textbook example of how to get almost everything wrong.

Policies That Made California’s Homeless Crisis Worse
An assortment of policy failures can be directly linked to why homelessness in California is a bigger problem than ever, even in the unlikely event the numbers of homeless have not dramatically increased. These policy failures have taken the form of overzealous court rulings, citizen approved ballot measures that wreaked havoc in their unintended consequences, and flawed legislation.

Court Decisions: The 9th Circuit Court of Appeals, unsurprisingly, is the author of at least three rulings that have tied the hands of law enforcement in dealing with the homeless. The first of these is Jones v. the City of Los Angeles, decided in 2006, that ruled that law enforcement and city officials can no longer enforce the ban on sleeping on sidewalks anywhere within the Los Angeles city limits until a sufficient amount of permanent supportive housing could be built. Subsequent to the Jones ruling, activist attorneys have repeatedly sued cities and counties to force them to define “permanent supportive housing” with specifications that make it far more difficult and expensive to get anything built.

An analysis published by Washington State based municipal law attorney Oskar Rey in June 2019 describes similar cases in other states. The Jones ruling was reinforced in September 2018, quoting from Rey, “in the case of Martin v City of Boise, where the 9th circuit found that the City of Boise’s enforcement of ordinances prohibiting camping, sleeping, or lying in public violated the Eighth Amendment ban on cruel and unusual punishment if an individual does not have a meaningful alternative (such as space in a shelter or a legal place to camp).”…

The practical impact of these cases is to create private space wherever a homeless person camps on publicly owned property. Apart from trying—often ineffectively—to prevent the homeless from blocking passage on roads and sidewalks, if a homeless person wants to camp in a public space, they cannot be removed.

State Ballot Initiatives: In 2014 California voters approved Proposition 47, which downgraded drug and property crimes. Prop. 47 has led to what police derisively refer to as “catch and release,” because suspects are only issued citations with a court date, and let go. With respect to the homeless, passage of this initiative has made it a waste of time for police to arrest anyone for openly using illegal drugs or for petty theft. Only very serious crimes are still investigated. Prop. 47 has enabled anarchy among the homeless and in the neighborhoods where homeless are concentrated.

In 2016, California voters approved Prop. 57, intended to make individuals convicted of nonviolent felony crimes eligible for parole. About 7,000 inmates became immediately eligible, and as of early 2016, there were about 25,000 nonviolent state felons who could seek early release and parole under Proposition 57. One can hope most of these released inmates reintegrated successfully into society. But those among this at-risk population who did not reintegrate joined California’s homeless.

State Legislation: Flawed legislation by California lawmakers would include AB 109, passed in 2011, which released tens of thousands of “non-violent” criminals out of county jails due to overcrowding without providing adequate means to monitor and assist their transition back into society. Thousands of these inmates were coping with drug addiction and mental illness, and they have found their way onto California’s streets and parks. Many of them are “non-violent” drug dealers or convicted thieves. As with Prop. 57, AB 109 has changed the character of California’s homeless population.

And then there’s the infamous AB 953, a ridiculous bit of legislation that epitomizes the mentality of California’s utopian leftist politicians. As if there weren’t enough laws and court rulings tying the hands of law enforcement, AB 953, the “The Racial and Identity Profiling Act of 2015” makes it even harder. This law, supposedly intended to address dubious claims, especially in California, of discriminatory policing, requires police departments to submit to the State of California an annual report of their “stop data.” The following table, drawn from this report, shows the “Officer Reporting Requirements.”…

When it comes to the practical effect of AB 953, it’s hard to find anything good. Every single time they interact with a citizen, officers have to input 17 variables into a form that is either paper (four pages, requiring reentry into a database), or onto a tablet, cell phone, or in-car laptop. The mere fact that this is a time consuming process will prevent a police officer from making as many stops during a normal shift, and may deter them from even making some stops. Worse, the data collected is designed either to prove or disprove that officers in any given police department are stopping a disproportionate number of citizens who are members of “protected status groups.” Needless to say, officers, and their departments, may become reluctant to exceed their “quotas,” and as a result have an incentive to not make stops when stops are warranted.

No summary of counterproductive state legislation would be complete without mentioning the laws that make it nearly impossible to get treatment for mentally ill homeless people. According to a report published by CalMatters, this problem began way back in 1967 in California with “a law signed by then-Gov. Ronald Reagan. Aimed at safeguarding the civil rights of one of society’s most vulnerable populations, the Lanterman-Petris-Short Act put an end to the inappropriate and often indefinite institutionalization of people with mental illnesses and developmental disabilities.”

Ever since, and especially in recent years as the percentage of homeless who suffer from mental illness has increased, attempts to reform the Lanterman-Petris-Short Act have been resisted tenaciously by the ACLU and other homeless advocacy groups. As reported by San Francisco’s public radio station KQED, during 2018 three laws were introduced by California legislators that would “attempt to change conservatorship rules to allow city health workers to help homeless people with substance abuse and mental health problems by legally and temporarily stepping in to force a mentally ill person into treatment.” Only one, SB 1045, became law, and the final version was so watered down that San Francisco’s Mayor London Breed, a liberal Democrat, claimed “As drafted, SB 1045 would allow us to help fewer than five individuals.” There are an estimated 7,000 homeless living on the streets of San Francisco.

Most of these court rulings and laws, nearly all of them passed or decided in the last decade, have made it far more difficult to manage California’s homeless population. Their effect has been to increase the proportion of mentally ill, drug addicts, and criminals as a percentage of the homeless, at the same time as police and social service workers have far less ability to detain, relocate, or even offer help to the homeless.

A New Threat of Medieval Disease Epidemics
Notwithstanding the many passed or proposed state laws that attempt to create more housing, or throw additional billions at the Homeless Industrial Complex only to be largely squandered, another set of state laws—either proposed or already passed—threaten to turn California’s homeless epidemic into a serious disease epidemic. In 2014 the California Legislature passed AB 2657, banning rat poison that uses anticoagulants. The reason for this legislation was to protect endangered species who feed on the poisoned rats and themselves become poisoned. While the law didn’t explicitly prohibit use of the poison within inner cities, the City of Los Angeles has stopped relying on the poison, and instead is setting traps and considering bringing in “working cats” to control the rodent population. It’s not working. An even more restrictive ban on effective rodenticides, AB 2422, is currently moving through California’s state legislature, and is expected to pass.

Most people agree that using poisons this potent should be restricted in suburban areas bordering wildlife habitat. But the consequences of denying its use in the downtown core of Los Angeles could be catastrophic to the human population. And the mountains of trash that create rat habitat are not just coming from homeless people, they are a product of a disastrous decision by the Los Angeles City Council that has led to mountains of uncollected trash from businesses and residences.

Retrieved July 14, 2019 from

About David H Lukenbill

I am a native of Sacramento, as are my wife and daughter. I am a consultant to nonprofit organizations, and have a Bachelor of Science degree in Organizational Behavior and a Master of Public Administration degree, both from the University of San Francisco. We live along the American River with two cats and all the wild critters we can feed. I am the founding president of the American River Parkway Preservation Society and currently serve as the CFO and Senior Policy Director. I also volunteer as the President of The Lampstand Foundation, a nonprofit organization I founded in 2003.
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