Increased Taxation and Centralized Authority are NOT the answer to homelessness

Both the Los Angeles City Council and the Los Angeles County Board of Supervisors are considering measures to “deal with homelessness”.  However, none of these measures take into account any of the STRUCTURAL causes of expensive housing or homelessness, and most of these structural causes are the direct result of GOVERNMENTAL POLICY.

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If you go down and hand out sandwiches and toiletry survival kits to homeless people, you will find that many have drug issues and many do seem to be not exactly sane. But, imagine living hopeless under a bridge for four years and think how sane you would be. . .  You also find that more and more homeless people are IMG_0928FAMILIES whose head(s) of household have lost employment or been gentrified out of the housing they were renting and can not come up with the first, last and security at the present rental cost. Truth be told, many Americans are only two paychecks away from homelessness themselves. In a recent Federal Reserve Board survey that monitors the financial and economic status of American consumers, it was revealed that 47% of respondents would have to either borrow or sell something to cover the cost of a $400 emergency.  How did this happen? How did being homeless, a condition that used to be called hobo-ism go from being a lifestyle of choice to an involuntary inescapable hell?

Well, in California, it all began with direct governmental policy changes that began in 1956. At this time almost all California cities and counties adopted General Plans that outlawed mixed use developments.  As a result, it was no longer legal to build the traditional form of affordable housing – two to four stories over commercial space, often adjacent to office space. With General Plan Updates in 1961, most cities instituted required parking space, lot setback and structure separation rules.   These updates effectively killed things like bungalow courts, a form of Screen Shot 2016-05-25 at 3.43.00 PMaffordable housing pioneered in Pasadena by Sylvannus Marston and built throughout Southern California by Hienemann and Hienemann, Marston, Elmer Gray and even R.M. Schindler. The last form of affordable housing to be destroyed was in 1966 by the zoning code was the disallowing of a second unit on a R-1 property.

With the rise of “Hippie” Communes in the 1960’s, communities passed Zoning ordinances that forbade more than five unrelated people from living in the same house.  Hence, the commune and the boarding house, also once very common in California, died. By 1970, literally every historic and Architectural form of affordable housing except the dingbat apartment with parking below, and massively dense government subsidized housing projects had been made illegal by State and local governments. In 1975 Jimmy Carter pulled all Federal Funding and subsidy for dense mass housing leaving only the dingbat apartment.


In 1978 there was a major revision to the building codes in California. This revision made building multifamily units like apartments much more expensive. It increased required parking spaces to 2.25 per unit, and required more sound deadening, first floor earthquake resistive walls, fire resistive framing and so on. These new costs could not net a fast enough return at the then prevalent multi digit interest rates, so would be apartment builders built them as condominiums. A waive of condominium building began to invade traditional neighborhoods that remained zoned R-2 after second backyard units were made illegal, and this resulted in a huge citizen backlash leading to anti condo city council people being elected all over the state and citizen lead efforts to downzone and make Condominiums difficult to achieve in traditional neighborhoods.

Oddly enough, the Condo projects kept being built.  The difference is that now they are only built by developers who have long term campaign contribution relationships with City Council and Board of Supervisor members.  (It’s a coincidence, we are certain!”)  Today, citizens don’t protest as vociferously as in the past to prevent these dense units from being built and an army of well paid fixers  lobby local electeds to convince them of the terrific merit of these awful projects that the rules once again must be shutterstock_232981666broken.

Here in Los Angeles the city council wants the people to tax themselves inorder to raise a one BILLION dollar bond issue to help solve homelessness. At the risk of sound cynical, this will generate a huge pile of money for city council people to dole out.  And although the details of where exactly the funds will be used and spent is still being worked through, it doesn’t take that active an imagination contracts being doled out to the list of long term campaign donors and well positioned non-profit organizations.  We could go into how many of these organizations pretending to be not for profit poverty amelioration groups actually function as get out the vote for Democratic Party Candidates.  But time is short and we touched on that in past articles.

Amazingly, the developers who make campaign contributions, even developers like the developer of Grand Avenue Project where the city is planning on donating $338 MILLION dollars in tax abeyance will not be required to generate a SINGLE affordable unit! Will granny units, a form of affordable housing that every homeowner can participate in get tax abeyance and reduction in covered parking like major developers get? Don’t be silly – the laws are for them to scrupulously obey. With no covered parking requirement, and set back lines the same as they were in the 1950’s, second units can be built for $60-75,000 each. The City of Los Angeles and the County of Los Angeles could literally make this possible overnight, no taxation required, but that would spread the benefits to the whole of the population rather than those who have done favors for the electeds. It could end the affordable housing crisis, not lead to dense future slums and not place localized strains on the infrastructure caused by increased density.

Meanwhile in Sacramento, Governor Brown wants California to create a new agency with lots of overpaid staff to oversee affordable housing.  He wants dense units built and his agency would override local community development rules for these dense affordable units.  Because of the inherent danger of crowding people together in ever smaller habitations, and because of the height  Guy with bill v3 generally required, the construction of each dense unit is EXTREMELY expensive, between $150-300,000 per unit.  Now compare that to the freestanding units we described earlier that could be built in a backyard for little more than $60-75,000.  This of course means that the unit can NEVER be as affordable as a backyard unit. It also means the developers involved can not be individuals but must be corporations who can amass and concentrate millions of dollars. Hmmmmmmm who do we suspect these developers will be? How much do you want to bet they are on the list of  Long term campaign donors, get out the vote not for profit groups – basically well connected special interest groups.

This will not lead to increased units that are affordable to wage earners. It’s just payola masked as do gooding.  So, what to do?

What will solve the homeless problem?

1.We need to re write the Zoning and Building codes so that individuals and small groups of people can build second back yard units and bungalow courts.

2.  America is the only nation on Earth that allows non-citizens to speculate in residential land. We need either a special property tax on non-citizen landowners or to prohibit non-citizens from owning land. This can only be resolved at the Federal level.

3. Outsourcing employment to Asia and Latin America makes all Americans poorer as does insourcing Screen Shot 2016-05-25 at 3.57.41 PMlabor through H-1 B and H-4 Visas, and an open border. Again, these are federal issues but issues that are driving up demand for housing while simultaneously decreasing the ability for wage earners to afford housing.

4. Finally, local citizens need to pass legislation demanding that large scale projects receiving zoning or exceptions to requirements of the code be put to a vote of the citizens and must pass at the same level as a tax increase. It follows that if the connected developers have to obey the same law as everyone else, then the law will change to be more fair both to the average citizen and the developers.


By Steve Lamb