Tuesday, January 15, 2019

Opinion: Faced with new taxes, more B.C. seniors are deferring their property taxes Vancouver Courier January 14, 2019

     Two weeks ago, I wrote about the increased taxes many Vancouver residents will be paying as a result of the latest BC Assessments and new provincial taxes. These include the so-called School Tax and so-called Speculation Tax, recently renamed the Speculation and Vacancy Tax even though it will apply to second homes occupied up to 182 days a year.
     In the article, I informed Courier readers about section 19(8) of the BC Assessment Act, which allows a property to be assessed at less than market value if it has been a principal residence for at least 10 years and assessed at a higher value because of its redevelopment potential for townhouses or apartments. I invited readers to email me for further details.
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     I subsequently heard from many of you.
     Some questioned whether the recent Vancouver policy allowing duplexes in single family zones would allow an appeal under section 19(8). It will not.
     Others thought the School Tax was particularly unfair since it will not be used to fund schools, and unlike good taxes, is not proportionate to one’s ability to pay.
     A few worried how the city could operate if it didn’t receive property taxes.The city will continue to receive money to operate, but it will come from the province, not the taxpayer.
     Many readers, worried about paying their increased tax bill, were disappointed to learn their properties would not qualify for a reduced assessment under section 19(8).
     I suggested that they consider deferring their taxes under the provincial program. While some agreed it is probably time to start doing so, others did not like the thought of a government lien against their property, having worked so hard to pay off their mortgage.
     I noted that while the program’s interest rate has increased, it is only 1.45 per cent for those 55 and over and 3.45 per cent for the Families with Children and Financial Hardship Programs.
Fortunately, no one asked me to explain why lower-income households with children or those suffering financial hardship must pay a higher interest rate than wealthy seniors who take advantage of the deferment program since it is not means tested.
     According to a recent report by seniors’ advocate Isobel Mackenzie, the number of seniors in B.C. who deferred their property taxes in 2017-18 grew by 53 per cent over four years. The total amount of property tax deferred last year was $208.8 million.
     Like me, Ms. Mackenzie believes the tax deferment program can be a good, cost-effective program for lower-income seniors struggling to pay their taxes, who could use the additional money to hire more help around the house.
      There are, however, some negatives associated with the tax deferment program. For one thing, should a homeowner want to take out a reverse mortgage or home-equity loan, they will likely have to pay the outstanding taxes at that time. Also, this program does not apply to those living on leased land.
     As the additional School Tax on homes over $3 million kicks in, expect more seniors to start deferring their taxes. Indeed, several people told me that while they hadn’t deferred their taxes in the past, they will now because of this much-hated tax.
     It is somewhat ironic that the School Tax was brought in to generate additional revenues for the province. However, the province may now need to borrow more money to give to the municipalities since more seniors will defer their property taxes.
     Before leaving the topic of property taxes, I must again question why the province has not reconsidered its Homeowner Grant Program. It offers grants of $570 or $700 to B.C. residents, regardless of their income, if their home is assessed at $1,650,000 or less, anywhere in the province. Properties assessed over that amount may receive a partial grant.
     In most B.C. locales, $1,650,000 will buy you one of the nicest properties in town. Why is the province giving a grant to these homeowners? Or any high-income homeowners for that matter? Why not provide more grants to low-income renters instead?
     By the time you read this, I will be on my way to China from where I’ll be writing my next column. It will not be about property taxes.

Sunday, January 6, 2019

From Malcolm Parry's Town Talk Vancouver Sun January 5, 2019

LIKE IT IS: In The Vancouver Sun Dec. 29, architect-developer-writer Michael Geller reviewed his 2018 real-estate predictions and made fresh ones for 2019. Missing was mention of his own West Vancouver Vinson House project that was completed in July. The scheme entailed moving a heritage home rearward and developing its lower floor and two new adjacent structures to make four residences on the erstwhile single lot. When the market softened and what looked to be sales pitches appeared in a community-newspaper article and in Geller’s emailed seasonal greetings, a colleague suggested that they might make him seem desperate. As smoothly as a showbiz comedian, Geller promptly wisecracked: “I am desperate.”

Opinion: Don’t expect big changes in Vancouver's housing market, except maybe your tax bill Vancouver Courier January 3, 2019

Of all the columns I have written over the past 4 1/2 years, this one has generated the greatest consumer response. There are a lot of people out there who normally don't complain about government policies who are incensed by the so-called School Tax. While I doubt that we can do anything about it until a Liberal government is elected in Victoria, as noted further in this column, those homeowners who are facing extraordinary property assessments because their property is located in an area that has been approved for higher density housing or mixed use development, can seek relief under secition 19(8) of the BC Assessment Act. Further details can be found here:  https://info.bcassessment.ca/Services-products/property-classes-and-exemptions/section-19-8-of-assessment-act-special-assessments-for-certain-long-term-residents

Speculation taxes, empty homes taxes and school taxes could pile up for some homeowner

     What’s going to happen to the housing market next year?
Hardly a day goes by when I’m not asked this question, whether in the grocery store or my club’s hot tub.      The fact is, there is no one housing market. There are many different markets. They include high-end single-family properties, entry level condominiums and new townhouse and apartment developments catering to move-down buyers ready to move out of their single-family homes.
     Another fact is none of us knows what is really going to happen. Just look at the 2019 outlooks from the national and local real estate associations. While the BCREA reports the downward trend in B.C. home sales is largely behind us and starting to trend upwards, the CREA contradicts this by predicting a further decline in sales.
     I am not expecting any significant increase in house prices, especially for single-family properties in the coming year. However, I am also not expecting a major crash in prices.
     What I do believe is that housing affordability will remain a serious problem for both Vancouver buyers and renters one year from now.
     There’s another thing about which I am quite certain. Many of us will be taking a much closer look at our property assessment notices when they arrive in early January. That’s because for the first time, “high-valued properties” will now be subject to the province’s so-called School Tax.
     This is not to be confused with the school tax that has appeared on your regular annual property tax notice and charged to every property in B.C. regardless of whether you or your family use the public or private school system.That tax remains.
     However, starting in 2019, an additional school tax applies to residential properties’ more than $3 million in assessed value.
     The additional tax rate is 0.2 per cent on the assessed value between $3 million and $4 million, and 0.4 per cent on the residential portion assessed over $4 million. For those of you for whom math was not your best subject and fortunate enough to own a $4.5-million home, this translates into an additional $4,000 on top of your regular property taxes which last year would have been just over $11,000.
     Now, if you own a home that is not your principal residence and not rented for at least six months of the year, you will be in for even more dramatic tax increases. That’s because you’ll have to pay the city’s so-called Empty Home Tax and the province’s so-called Speculation Tax.
     On a $4.5-million home, the city’s tax will be $45,000 (that’s not a typo) and the Speculation Tax will be an additional $22,500 to $90,000 depending on whether you are a B.C. resident, a Canadian citizen who does not live in B.C., or someone who lives outside of Canada.
     While many are applauding these additional taxes, I am not. For one thing, they are going to impact new housing supply in the coming years. This in turn will reduce the number of jobs in the construction industry as well as furniture and decorating sales, and so on.
     Ironically, a housing slowdown will also reduce the permit fees, Development Cost Levies and Community Amenity Contributions to which the city has become addicted in recent years.
While on the topic of property taxes, I would like to remind readers of something from my Courier column of a year ago.
     Homeowners facing dramatic tax increases due to Community Plan or zoning changes can often qualify for much lower taxes under Section 19(8) of the Assessment Act, which allows residential land to be assessed at less than market value where the owner occupied the property as their principal residence continuously for 10 years.
     For some Marpole or Cambie Corridor bungalows, the reduced assessment and taxes may be less than half of what an investor would pay for an identical property.
     To qualify for this tax relief, the owner should have submitted a completed application form to B.C. Assessment by Nov. 30. However, if you didn’t take my advice last year, contact the local B.C. Assessment area office as applications received until March 15 may qualify for processing through the assessment review process. Email me if you want more details.
     Best wishes for an affordable 2019.
Twitter @michaelgeller

Wednesday, January 2, 2019

Seattle Under Siege: by Chris Rufo. Can Vancouver learn from Seattle's experience in dealing with the homeless?

Seattle Under Siege

Record numbers of homeless people are occupying the city’s public spaces, despite massive government spending to fight the problem.

Seattle is under siege. Over the past five years, the Emerald City has seen an explosion of homelessness, crime, and addiction. In its 2017 point-in-time count of the homeless, King County social-services agency All Home found 11,643 people sleeping in tents, cars, and emergency shelters. Property crime has risen to a rate two and a half times higher than Los Angeles’s and four times higher than New York City’s. Cleanup crews pick up tens of thousands of dirty needles from city streets and parks every year.

At the same time, according to the Puget Sound Business Journal, the Seattle metro area spends more than $1 billion fighting homelessness every year. That’s nearly $100,000 for every homeless man, woman, and child in King County, yet the crisis seems only to have deepened, with more addiction, more crime, and more tent encampments in residential neighborhoods. By any measure, the city’s efforts are not working.

Over the past year, I’ve spent time at city council meetings, political rallies, homeless encampments, and rehabilitation facilities, trying to understand how the government can spend so much money with so little effect. While most of the debate has focused on tactical policy questions (Build more shelters? Open supervised injection sites?), the real battle isn’t being waged in the tents, under the bridges, or in the corridors of City Hall but in the realm of ideas, where, for now, four ideological power centers frame Seattle’s homelessness debate. I’ll identify them as the socialists, the compassion brigades, the homeless-industrial complex, and the addiction evangelists. Together, they have dominated the local policy discussion, diverted hundreds of millions of dollars toward favored projects, and converted many well-intentioned voters to the politics of unlimited compassion. If we want to break through the failed status quo on homelessness in places like Seattle—and in Portland, San Francisco, and Los Angeles, too—we must first map the ideological battlefield, identify the flaws in our current policies, and rethink our assumptions.

Seattle has long been known as one of America’s most liberal locales, but in recent years, the city has marched even further left as socialists, once relegated to the margins, have declared war on the Democratic establishment. Socialist Alternative city councilwoman Kshama Sawant claims that the city’s homelessness crisis is the inevitable result of the Amazon boom, greedy landlords, and rapidly increasing rents. As she told Street Roots News: “The explosion of the homelessness crisis is a symptom of how deeply dysfunctional capitalism is and also how much worse living standards have gotten with the last several decades.” The capitalists of Amazon, Starbucks, Microsoft, and Boeing, in her Marxian optic, generate enormous wealth for themselves, drive up housing prices, and push the working class toward poverty and despair—and, too often, onto the streets.

On the surface, this argument has its own internal logic. Advocates point to Zillow and McKinsey studies that show a high correlation between rent hikes and homelessness in Seattle, for example. But correlation is not causation, and the survey data paint a remarkably different picture. According to King County’s point-in-time study, only 6 percent of homeless people surveyed cited “could not afford rent increase” as the precipitating cause of their situation, pointing instead to a wide range of other problems—domestic violence, incarceration, mental illness, family conflict, medical conditions, breakups, eviction, addiction, and job loss—as bigger factors. 

Further, while the Zillow study did find correlation between rising rents and homelessness in four major markets—Seattle, Los Angeles, New York, and Washington, D.C.—it also found that homelessness decreased despite rising rents in Houston, Tampa, Chicago, Phoenix, St. Louis, San Diego, Portland, Detroit, Baltimore, Atlanta, Charlotte, and Riverside. Rent increases are a real burden for the working poor, but the evidence suggests that higher rents alone don’t push people onto the streets.

Even in a pricey city like Seattle, most working- and middle-class residents respond to economic incentives in logical ways: relocating to less expensive neighborhoods, downsizing to smaller apartments, taking in roommates, moving in with family, or leaving the city altogether. King County is home to more than 1 million residents earning below the median income, and 99 percent of them manage to find a place to live and pay the rent on time. The aggregate-level analyses from Zillow and McKinsey don’t take into account the vast number of options available even to the poorest families; for the socialists, “the rent is too damn high” explains everything.

Using homelessness as a symbol of “capitalism’s moral failure,” the socialists hope to build support for their agenda of rent control, public housing, minimum-wage hikes, and punitive corporate taxation. One might dismiss Sawant as cartoonish, but she has been remarkably successful in stoking resentment against “Amazon tech bros” and building public support for punishing the “billionaire class” with new taxes.

What the socialists won’t, or can’t, see is that their agenda cannot solve the homelessness crisis. Even if the Sawant-championed “head tax” on big employers had stayed in force—it was repealed in June—the city would have built, at most, only 187 subsidized housing units per year, which means that it would take at least 60 years to provide housing for all those currently homeless. Sawant’s real passion, it seems, is not to build houses for the poor but to tear down the houses of the rich. When her ideas fail to usher in a socialist utopia, she’ll find new scapegoats—corporations, real-estate developers, tech workers, police—and start over.

The stubborn reality is that Seattle is expensive. The local government should encourage the creation of more affordable market-rate housing by increasing density and changing zoning laws, but for those not employed full-time—and that describes 92.5 percent of the homeless—it’s utopian to imagine that Seattle will become the city of Housing for All. No matter how many promises the socialists make, they will eventually run out of other people’s money. The scapegoats, silent up to now, will start fighting back. And Amazon, the greatest wealth generator in the city’s history, will simply leave town.

“What the socialists won’t, or can’t, see is that their agenda cannot solve the homelessness crisis.”
The compassion brigades are the moral crusaders of homelessness policy, the activists who put signs on their lawns that read: “In this house, we believe black lives matter, women’s rights are human rights, no human is illegal,” and so on. They see compassion as the highest virtue; all else must be subordinated to it. Their Seattle political champion is City Councilman Mike O’Brien, a former chief financial officer for the corporate law firm Stokes Lawrence, who made his name in Seattle politics fighting to ban Yellow Pages deliveries and build a bike lane through a working shipyard in the Ballard neighborhood. In recent years, O’Brien has become a leader in the campaign to legalize homelessness throughout the city. He has proposed ordinances to legalize street camping on 167 miles of public sidewalks, permit RV camping on city streets, and prevent the city’s homeless Navigation Teams (made up of cops and outreach workers) from cleaning up tent cities.

O’Brien and his supporters have constructed an elaborate political vocabulary about the homeless, elevating three key myths to the status of conventional wisdom. The first is that many of the homeless are holding down jobs but can’t get ahead. “I’ve got thousands of homeless people that actually are working and just can’t afford housing,” O’Brien told the Denver Post. But according to King County’s own survey data, only 7.5 percent of the homeless report working full-time, despite record-low unemployment, record job growth, and a record-high $15 Seattle minimum wage. The reality, obvious to anyone who spends any time in tent cities or emergency shelters, is that 80 percent of the homeless suffer from drug and alcohol addiction and 30 percent suffer from serious mental illness, including bipolar disorder and schizophrenia.

The second key myth is that the homeless are “our neighbors,” native to Seattle. Progressive publications like The Stranger insist that “most people experiencing homelessness in Seattle were already here when they became homeless.” This assertion, too, clashes with empirical evidence. More than half of Seattle’s homeless come from outside the city limits, according to the city’s own data. Even this number might be vastly inflated, as the survey asks only “where respondents were living at the time they most recently became homeless”—so, for example, a person could move to Seattle, check into a motel for a week, and then start living on the streets and be considered “from Seattle.” More rigorous academic studies in San Francisco and Vancouver suggest that 40 percent to 50 percent of the homeless moved to those cities for their permissive culture and generous services. There’s no reason to believe that Seattle is different on this score.

The third myth: O’Brien and his allies argue that the street homeless want help but that there aren’t enough services. Once again, county data contradict their claims: 63 percent of the street homeless refuse shelter when offered it by the city’s Navigation Teams, claiming that “there are too many rules” (39.5 percent) or that “they are too crowded” (32.6 percent). The recent story about a woman’s “tent mansion” near the city’s Space Needle vividly illustrated how a contingent among the homeless chooses to live in the streets. “We don’t want to change our lifestyle to fit their requirements,” the woman told newscasters for a KIRO7 report, explaining how she and her boyfriend moved from West Virginia to Seattle for the “liberal vibe,” repeatedly refusing shelter. “We intend to stay here. This is the solution to the homeless problem. We want autonomy, right here.”

The homeless mythology is not merely anti-factual; it’s also a textbook example of what sociologists call pathological altruism, or “altruism in which attempts to promote the welfare of others instead result in unanticipated harm,” as engineer Barbara A. Oakley explains. The city’s compassion campaign has devolved into permissiveness, enablement, crime, and disorder. Public complaints about homeless encampments from the first three months of this year are an array of horrors: theft, drugs, fighting, rape, murder, explosions, prostitution, assaults, needles, and feces. Yet prosecutors have dropped thousands of misdemeanor cases, and police officers are directed not to arrest people for “homelessness-related” offenses, including theft, destruction of property, and drug crimes. As Scott Lindsay, the city’s former top crime advisor, reported to former mayor Ed Murray: “The increase in street disorder is largely a function of the fact that heroin, crack, and meth possession has been largely legalized in the city over the past several years. The unintended consequence of that social policy effort has been to make Seattle a much more attractive place to buy and sell hard-core drugs.”

Yet the compassion advocates man the barricades whenever the city attempts to clean up illegal tent encampments. In the Ravenna neighborhood, protesters holding up a “Homeless Lives Matter” sign linked arms and tried to block police from removing a tent city from a public park. Nothing is apparently more important to the activists than their public display of compassion—certainly not the growing number of depraved incidents at homeless encampments or involving homeless people, including a mass shooting, a human immolation, a vicious rape, and a series of stabbings. They shout down anyone who questions their narrative.

With more than $1 billion spent on homelessness in Seattle every year, one should keep in mind Vladimir Lenin’s famous question: Who stands to gain? In the world of Seattle homelessness, the big “winners” are social-services providers like the Seattle Housing and Resource Effort (SHARE), the Low Income Housing Institute (LIHI), and the Downtown Emergency Service Center (DESC), which constitute what I call the city’s homeless-industrial complex. For the executive leadership of these organizations, homelessness is a lucrative business. In the most recent federal filings, the executive director of LIHI, Sharon Lee, earned $187,209 in annual compensation, putting her in the top 3 percent of income earners nationwide. In my estimation, the executive director of DESC, Daniel Malone, has received at least $2 million in total compensation during his extended career in the misery business.

It wasn’t always this way. When I spoke with Eleanor Owen, one of the original cofounders of DESC, she explained that the organization’s mission has shifted over the years from helping the homeless to securing government contracts, maintaining a $112 million real-estate portfolio, and paying a staff of nearly 900. “It’s disgraceful,” she said. “When we started, we kept our costs low and helped people get back on their feet. Now the question is: How can I collect another city contract? How can I collect more Medicaid dollars? How can I collect more federal matching funds? It’s more important to keep the staff paid than to actually help the poor become self-sufficient.”

The deeper problem is that social policies have created a system of perverse incentives. The social-services organizations get paid more when the problem gets worse. When their policy ideas fail to deliver results, they repackage them, write a proposal using the latest buzzwords, and return for more funding. Homelessness might rise or fall, but the leaders of the homeless-industrial complex always get paid.

Their latest scheme in Seattle is to build city-funded “tiny-house villages,” a euphemism for semipermanent homeless tent cities subsidized by taxpayers. Advocates have touted tiny houses as an alternative to illegal encampments, but the results have been uninspiring. After the city opened a drug-friendly tiny-house village in Licton Springs—costing taxpayers $720,000 a year—police reported a 221 percent increase in crimes and public disturbances. Neighbors have witnessed an explosion of property destruction, violence, prostitution, and drug-dealing.

Even worse, SHARE, which runs the Licton Springs encampment, effectively uses taxpayer money to lobby the city for more taxpayer money. SHARE operates the encampments on a system of “participation credits,” apparently requiring residents to attend political rallies, campaign events, and city council meetings. At last year’s city income-tax hearing at the King County Superior Court, I spoke with a homeless woman living in a SHARE encampment, who explained that if she did not show up to the court proceeding, she would be kicked out of the camp for a week. (This is likely illegal and may have contributed to interim mayor Tim Burgess’s decision to cut the group’s funding.)

Ultimately, the homeless-industrial complex is a creation of public incentives, constantly on the hunt for bigger contracts. Its new promise, Housing First—an old promise, actually, since it dates back to 1988—is that the city can solve the homelessness and cost-of-living crisis at once if it will fund enough new units of subsidized housing. Advocates insist that the city can build “affordable housing” not only for the homeless but also for everyone earning up to 80 percent of the median income, which, in King County, amounts to more than 800,000 people. No city can build its way out of either problem with subsidized housing, which, like any other good, is subject to the laws of supply and demand. If apartments are made available at below-market rents, demand for those units will always outstrip supply. For every low-rent apartment that the city builds, another thousand people will be standing in line, in perpetuity. New York has been building “affordable housing” since 1934 and still has a wait list of 270,000 families.

Despite repeated warnings from Seattle’s own homelessness consultants, the city and county governments continue to funnel hundreds of millions of dollars to low-income housing developers and service providers, to no avail. Until policymakers change the system of incentives, there will be no end to the cycle of waste and corruption.

What I call the addiction evangelists make up the final cohort of the city’s homelessness power center. Their number includes the rebellious Ave Rats—the homeless crowd on University Avenue—as well as gutter punks and opioid migrants. In a sense, the addiction evangelists are the intellectual heirs of the 1960s counterculture: whereas the beats and hippies rejected bourgeois values but largely confined their efforts to culture—music, literature, photography, and poetry—the addiction evangelists have a more audacious goal: to capture political power and elevate addicts and street people into a protected class. They don’t want society simply to accept their choices; they want society to pay for them.

Their leading proponent is Shilo Murphy, a heroin and cocaine addict who runs the People’s Harm Reduction Alliance. His worldview can be summarized in a series of T-shirts that he sports around town: “Proud to Be a Drug User,” “Nice People Take Drugs,” and “Meth Pipes! Because Crack Pipes Are So Five Years Ago.” For Murphy, the goal is not prevention, recovery, or rehabilitation—but normalization of addiction and dedicated public funding for the consumption of heroin, meth, and crack cocaine. “I have always enjoyed drugs, and they’ve always made my life better,” he says. “I [see] drugs as not only a means to escape but a means to inspire me for greatness.”

Incredibly, Murphy has become a player in Seattle politics. The city provides funding for his organization, and King County has recruited him to serve on its opioid task force. His unabashedly pro-addiction campaign is winning: he was one of the key proponents for “safe-injection sites” and recently announced a new heroin-on-wheels project, in which People’s Harm Reduction Alliance vans will roam the city and help addicts shoot up, under a nurse’s supervision. While the official philosophy of Murphy’s organization is “harm reduction,” the real goal seems to be public support for addiction.

Harm reduction has had notable success in countries like Portugal and Switzerland, but in North America, where national drug policy remains staunchly prohibitionist, cities that practice the policy have become magnets for addiction, crime, and social disorder. During the debate on public-injection sites last year, the addiction evangelists often pointed to Vancouver, which has operated the Insite supervised-consumption facility for over ten years. While Insite provides clean needles and administers naloxone injections for overdoses, the evidence from a longitudinal study of the Downtown Eastside neighborhood shows that the injection site and concentration of social services have substantially increased the number of opioid migrants moving to the city. According to the study, between 2006 and 2016, the number of homeless individuals from outside Vancouver rose from 17 percent to 52 percent of the total homeless population. “Migration into urban regions with a high concentration of services may not necessarily lead to effective pathways to recovery,” the study concludes. Indeed, since the Insite facility opened, crime in the neighborhood has increased and homelessness has nearly doubled; no reduction in addiction has occurred.

“What I call the addiction evangelists includes the rebellious Ave Rats—the homeless crowd on University Ave.”
The question almost never asked about harm reduction is: Harm reduction for whom? Whatever help they might offer addicts, public-consumption sites do tremendous damage to businesses, residents, and cities at large. When I visited Vancouver and drove down Hastings Street, where the Insite facility is located, it looked like an apocalyptic future vision of Seattle—a public-health nightmare, with hundreds of addicts lining the sidewalks, yelling, and shooting up behind Dumpsters.

In Seattle, the influx has already begun. According to survey data, approximately 9.5 percent of the city’s homeless say that they came “for legal marijuana,” 15.4 percent came “to access homeless services,” and 15.7 percent were “traveling or visiting” the region and decided that it was a good place to set up camp. As the city builds out its addiction infrastructure and focuses social services in the downtown core, the problem will intensify. Even King County’s former homelessness czar admits that the city’s policies have a “magnet effect.”

Yet the addiction evangelists are making gains. More than 70,000 residents signed a ballot initiative to ban safe-injection sites countywide, but legal and public-health officials threw the measure out in court, declaring that “public health policy is not subject to veto by citizen initiative.” It’s a strange new world, where addicts and vagrants are the good guys and Amazon engineers and sober neighbors are the villains.

In 2005, the top experts in Seattle and King County government formed the Committee to End Homelessness and launched a ten-year plan to eliminate the problem in metro Seattle. The plan has clearly proved a dismal failure. “We’re spending lots of money trying things out and are finding what’s not working,” Seattle’s current homelessness czar puts it, with wry understatement.
Unfortunately, Adrienne Quinn, the new boss of the Committee to End Homelessness—which has since rebranded itself as All Home—is even worse than the old boss. In an op-ed in the Seattle Times, she lays out her plan to “address the root causes of homelessness” by solving “racism,” “wage inequity,” “climate change,” “housing costs,” “public transportation,” “green building,” “sanctuary [cities],” the “child-welfare system,” “brain injuries,” and “mental-health and addiction services.” This, not surprisingly, requires lots more money. Councilwoman Sawant claims that the city needs another $75 million a year to solve the crisis. McKinsey puts the figure at $400 million. But no amount of money will make any difference until we correctly diagnose the problem and focus on practical solutions, not utopian dreams.

The problem is not Seattle’s alone: the United States generally remains in denial about the reality of homelessness. While ideologues denounce various villains who “cause” homelessness—capitalists, landlords, racists, computer programmers—the reality is that homelessness is a product of disaffiliation. For the past 70 years, sociologists, political scientists, and theologians have documented the slow atomization of society. As family and community bonds weaken, our most vulnerable citizens fall victim to the addiction, mental illness, isolation, poverty, and despair that almost always precipitate the final slide into homelessness. Alice Baum and Donald Burnes, who wrote the definitive book on homelessness in the early 1990s, put it this way:
Homelessness is a condition of disengagement from ordinary society—from family, friends, neighborhood, church, and community. . . . Poor people who have family ties, teenaged mothers who have support systems, mentally ill individuals who are able to maintain social and family relationships, alcoholics who are still connected to their friends and jobs, even drug addicts who manage to remain part of their community do not become homeless. Homelessness occurs when people no longer have relationships; they have drifted into isolation, often running away from the support networks they could count on in the past.
The best way to prevent homelessness isn’t to build new apartment complexes or pass new tax levies but to rebuild the family, community, and social bonds that once held communities together. As Richard McAdams, a recovered addict and current outreach worker for the Union Gospel Mission, told me: “There are 6,000 people on the streets in Seattle. I know 3,000 of them by name and know their stories. It’s not a resource issue in this city, it’s a relational issue. The biggest problem is broken relationships.”

In the near term, cities like Seattle, Portland, San Francisco, and Los Angeles must shift toward a stance of realism, which means acknowledging that compassion without limit is a road to disaster. Homelessness should be seen not as a problem to be solved but one to be contained. Cities must stop ceding their parks, schools, and sidewalks to homeless encampments. And Seattle, in particular, must stop spending nearly $1 billion a year to “solve homelessness” without clear accountability and visible results.
Representing homelessness as a symbol of capitalism’s failure, Seattle’s progressives are trying to build support for a social-justice agenda. (DARIN ROGERS / ALAMY STOCK PHOTO)
Representing homelessness as a symbol of capitalism’s failure, Seattle’s progressives are trying to build support for a social-justice agenda. (DARIN ROGERS / ALAMY STOCK PHOTO)
Encouragingly, citizens and local governments all along the West Coast are starting to demand an end to the policy of unlimited compassion. Fed-up neighbors recently confronted Councilman O’Brien at a town hall in Green Lake, and members of the Iron Workers Local 86 shouted down Sawant at a political rally in front of the Amazon Spheres. Even in hyper-progressive San Francisco, Mayor Mark Farrell recently announced a dramatic change in the city’s understanding of street homelessness: “We have moved as a city from a position of compassion to enabling street behavior. We have offered services time and time again and gotten many off the streets, but there is a resistant population that remains, and their tents have to go. Enough is enough.”

In Seattle, Mayor Jenny Durkan, who made her reputation as a federal prosecutor, is faced with a clear choice: appease the compassion brigades and the homeless-industrial complex, or break free from the status quo and take decisive action to address the crisis. If she can summon the political will, Durkan can implement some emergency measures that will dramatically reduce the social disorder associated with street homelessness. For examples, she can look to other cities that have shown that homelessness can be contained with smart, tough policies.

In San Diego, for instance, city officials and the private sector worked together to build three barracks-style shelters that house nearly 1,000 people for only $4.5 million. They’ve moved 700 individuals off the streets and into the emergency shelter, allowing the police and city crews to remove and clean up illegal encampments. In Seattle, the mayor should petition the private sector for donations to build similar emergency shelter facilities, construct them on vacant city property in the industrial district, and run a dedicated free bus line from the shelters to the downtown core so that residents can access additional services and eventually find work.

In Houston, local leaders have reduced homelessness by 60 percent through a combination of providing services and enforcing a zero-tolerance policy for street camping, panhandling, trespassing, and property crimes. Seattle’s police department and Navigation Teams must be given the authority to enforce the law and put an end to rampant street camping. There’s nothing compassionate about letting addicts, the mentally ill, and the poor die in the streets. The first order of business must be to clean up public spaces, move people into shelters, and maintain public order.

Seattle and King County currently spend nearly $460 million a year on addiction and mental-health services, plus another $119 million a year on medical services specifically for the homeless—more than enough money to provide basic services for all the homeless who want them. With a secure emergency shelter system like that in San Diego, the county and city governments can reroute existing resources and “flood the zone” with on-site treatment options for the homeless. For addiction services, we should prioritize recovery programs and terminate policies like safe-injection sites that draw addicts from other cities.

Seattle must break up its homeless-industrial complex, too. Last year, interim mayor Burgess took a first step in rebidding city contracts and cutting funding for ineffective organizations like SHARE. Mayor Durkan should build on this success, reforming the system of perverse incentives and instituting accountability for all organizations getting taxpayer funds. Outcomes, not quantity of services, should take precedence; funding should taper off as the crisis subsides, not continue in perpetuity.

Ultimately, the success or failure of local government is a back-to-basics proposition: Are the streets clean? Are the neighborhoods safe? Are people able to live, work, and raise their families in a flourishing environment? We have the resources to contain the homelessness crisis, in Seattle and elsewhere. The question is whether political leaders will have the courage to act.