The Failure of Public Housing (Part 4)

The reason public housing projects fail is that governments or more readily public-private partnerships in the U.S. not only don't produce nearly enough units to meet the housing demand of residents who cannot afford rent or don’t produce them in a cost effective way but also because they are often poorly planned and executed. This was the case for the state of California under Newsom after they tried and so far failed to materialize 1,200 tiny houses for over 181,000 homeless persons in the state. While this affordable housing model has worked in other parts of the country and as a Portland State University study found is more conducive to homeless residents moving on to permanent housing than city shelters or motels, California figured out how to fuck it up. They made a perfectly viable affordable housing model nonviable by inviting cities to purchase them from vendors with cash grants from the state that are less than the cost of building the tiny houses.

Instead of buying and delivering the units, the state decided to send several of the cities cash grants and let them order the tiny homes themselves. In San Jose, this left the city on the hook for more money than anticipated. The state awarded the city $13.3 million. Building the planned tiny homes for 200 people will cost $22.7 million, according to Mayor Mahan.

For those with basic arithmetic skills that’s $113,500 per homeless person for a shelter that is likely no larger than 100 square feet. The asinine price gouging and real estate speculation is one of the reasons public housing fails in California. The proposal also was not preceded with any land banking on the part of the recipient cities, leaving them scrambling for lots instead of having designated lots waiting to be set up as tiny house villages and allowing their own bureaucratic machinations to delay set up with a prolonged review, permit and inspection process that is usually delayed even further by public hearings in which NIMBYs can filibuster any perceived threat to their precious property values. Some cities like San Jose aren’t satisfied with a basic 70 square foot sleeping unit and want bathrooms attached which nearly triples the price from $18,900 per unit to $55,350 per unit, a price tag made inevitable by state requirements for the tiny houses. The net result has been very few orders for the state approved tiny houses. Failing to provide tiny house villages for homeless residents is not new territory for a state that has spent billions of dollars on homeless services over the past decade that has only resulted in a higher homeless population. Recently, state auditors found that the state only has two cost effective homeless programs with most being inaccessible due to a lack of data on their outcomes.