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Big Tech isn’t the Problem with Homelessness. It’s All of Us

In San Francisco—and most West Coast cities—acute poverty and homelessness mix uneasily with wealth and comfort. (David Paul Morris, Bloomberg, Getty Images)

Amid all the digital wealth, the big cities of the West are racked with the destitute. We know how to solve this problem, so what’s stopping us?

THE ICONS OF downtown San Francisco are the same whether you’re looking at the buildings or at your phone. In the blocks around the undulating, metal-screened length of the city’s new bus and train terminal, skyscrapers—including the city’s tallest—flash all the familiar logos. There’s Salesforce and its new tower, of course, but also LinkedIn, Google, Twilio, Zipcar, Github, Okta, and Dropbox. Facebook, which already had something like 3,000 employees in one skyscraper, has signed a lease on all 725,000 square feet of another one. It’s a gleaming, pixelated future—mostly clean, mostly shiny, punctuated by cranes and pile drivers pushing foundations through the city’s wobbly ground in search of bedrock.

THE ICONOGRAPHY CHANGES just a 15-minute walk to the west. The tech businesses are in that neighborhood, known as the Tenderloin, too—most notably Twitter and Uber. But here the city’s biggest problem—and California’s, and the country’s—is just as conspicuous as all those tech billions downtown: Homeless people sit or lean at building entrances. The sidewalks are filthy. Amid a few signs of construction and gentrification, like remodeled theaters and hotels, are bodegas, shelters, supportive housing, aid agencies.

It’s a mind-boggling transition. A neighborhood, maybe 15 square blocks, of developing-world-level poverty in the heart of California, the world’s fifth-largest economy. The Bay Area is the home of Apple, Facebook, Google, Twitter, Uber, LinkedIn, Tesla, eBay, Netflix, Cisco, and much of the capital that funds the early stages of the companies that aspire to join these kinds of lists. Money flows around the Bay Area like packets of information on a global digital network: freely and in great quantity.

Yet on a single night in January of 2017, San Francisco had 6,858 homeless people. Santa Clara County, home of San Jose and a decent chunk of Silicon Valley, had 7,394. (Los Angeles County had 55,188.) California overall had 134,278 homeless people, half of them completely unsheltered, most of them in cities. That’s one quarter of all the homeless people in the US. San Francisco’s recent mayoral race turned, in part, on homelessness, and the governor’s race may, too. The city is turning into a Brechtian horror show where young men wearing Airpods and backpacks emblazoned with the names of gig-economy apps weave e-scooters among people passed out in their own filth.

That’s not even the most frustrating part. This is: Everyone who works on homelessness agrees on the way to fix the problem. Build more homes. Not coincidentally, more places for people to live would help alleviate all sorts of other problems, from climate change to income inequality. But the kinds of housing California needs are not the kinds that get built. The reasons amount to an obstacle course built from policy mistakes, economic vicissitudes, and prejudice. “This is not something like pancreatic cancer, where thousands of scientists are striving to find a solution for a really difficult problem that we literally don’t know what to do about,” says Margot Kushel, a professor of medicine at UCSF who studies homelessness. “We actually know what to do. We just lack the will.”

A RECENT REPORT from the UCLA Anderson School retells a familiar tale. Housing starts nationwide have doubled since the 2008 crash but still aren’t keeping up with demand. That problem is at its worst in California and the Pacific Northwest (oh, hi, headquarters of Amazon and Microsoft). As the UCLA economist David Shulman puts it in his section of the report, if you own a home in those parts of the world, you are psyched. Value is way up. If you’re a renter without rent control or you hope to buy a home, you are a person whom it sucks to be.

Zoning rules and regulations make it even harder to build new homes. Construction labor is hard to find, and new tariffs on Canadian lumber have pushed the price of wood up 50 percent. But the market’s so tight, builders are able to pass all those costs along to buyers. “Housing activity is plagued by excessive zoning constraints in the hot employment markets of the Pacific Coast and the Northeast,” Shulman writes. “Larger homebuilders have learned to profit from the tight zoning controls as regulation works to reduce competition.”

As a consequence, despite demand and a decent economy, far too few houses get built anywhere—especially in cities. In the past decade, we needed 15 to 20 million new housing units to keep up; the country built a tenth of that. Demand, meet supply: Prices have soared—especially in places like California, which is adding high-paying tech jobs and is, let’s face it, a damn nice place to live.

Worse still, the federal government has mostly been out of the subsidized-housing business since the 1980s (when the current homeless crisis had its start). That pushed responsibilities outward, to states and municipalities, which mostly can’t afford to fix it.

The result is pressure on young people, people of color, and the poor. People trying to climb onto the ladder can’t get a handhold; people on the ladder’s bottom rungs get flung off by people nearer the top. They face an impossible choice: Move somewhere cheaper, if they can, or become homeless.

Tent cities, like this one in Los Angeles, have proliferated in urban centers of the West Coast. (Fredericc J. Brown, AFP, Getty Images)

Unlike many East Coast cities, West Coast localities tend not to have right-to-shelter laws. They’re not on the hook to provide a bed for everyone who needs one. Instead, the West Coast has tent cities. Homelessness in the US has stayed relatively stable—0.2 percent of the US population was homeless in 2012 and 0.17 percent in 2017. But in Los Angeles County, that number went from 0.35 percent to 0.54 percent. That’s 55,000 people, a whopping 40,000 of them completely unsheltered. So even in LA’s rapidly gentrifying central business district, tent cities have come to seem like an intractable problem. It’s true along the access roads and freeway underpasses of the Bay Area, as well.

The thing is, this problem is solvable. The science, as shown in large-scale, randomized trials, is pretty solid. For families, housing vouchers—where the government pays for a giant chunk of rent—really do work. But only if the homes are there, a particular problem in high-cost markets like California. “You’ve got to not only provide money to pay rent, you’ve got to boost the supply,” says Carol Wilkins, a longtime consultant on homelessness.

People who are chronically homeless—defined as being without shelter four times a year or more—and who often have addiction or mental health problems are well served by a philosophy called Housing First, which finds them what’s called permanent supportive housing that provides access to services as well as shelter. Until recently, even homeless advocates found this idea radical. Best practice was first to get people off drugs if they were addicted or on them if they were mentally ill—before they were eligible for housing. That’s not the state of the science anymore. “You basically come as you are,” Kushel says. “There is no assumption you’ll be clean and sober or take psychiatric medications. Once you’re in housing, the supportive services wrap around you.”

The trick, though, is that there has to be enough housing available to make all this happen. You need enough homes for people who can afford to rent or buy them, and then enough on top of that to provide room for people with vouchers—by definition below market rate—and permanent supportive units, by definition way below market rate. It’s expensive.

And it has to be spread around cities, in all kinds of neighborhoods—not just the least desirable lots up against a freeway, or a neighborhood like the Tenderloin (which, apparently unique among San Francisco neighborhoods, allows services and supportive housing and prohibits its demolition). “You can’t concentrate the poverty. You cannot put all the affordable housing in one place. We went through that in the 1950s and 1960s and 1970s, and what did we end up with? New ghettos,” says Robert Friant, managing director for external affairs, communications, and training center at the Corporation for Supportive Housing. “Taking 150 people and putting them on some industrial site far away from where they can access services they need only prolongs the poverty.”

Aside from the moral imperative of helping human beings who are in trouble, getting people housed turns out to be a cheaper, lower-impact solution to all sorts of public health concerns. Homeless people, especially the chronically homeless, experience health problems as disparate as tooth infections and eye problems, trench foot, and body lice up through infectious diseases like tuberculosis and hepatitis A.

Many of these wouldn’t happen at all in people who were housed, or would be easily treatable in early stages in people who had access to primary health care. There’s a reason six health care institutions in Portland, Oregon, donated $21.5 million for constructing housing for the homeless in 2016, and the massive Oakland-based health care system Kaiser Permanente has said it will invest $200 million in affordable and accessible housing.

That reason? It’s cheaper than an emergency room visit. “In the highest-risk people, you can offset the costs,” Kushel says. And in the rest, the best available research says Housing First might not save money—but it’s better spent on prevention than on emergency rooms. Permanent supportive housing, while expensive, likewise seems to reduce the costs of late-stage treatment of addiction and mental health disorders.

These numbers can be difficult to calculate. Economic assessments of helping the homeless tend not to include other costs, like deployment of first responders to encampments, periodic showpiece cleanups of those encampments, street cleaning services, losses in tourism and business dollars, and all the other things cities pay attention to. Take those costs into account and you’re looking at tangible financial benefits generated by solutions already known to be effective.

Vouchers. Cheaper housing. Permanent support. “We know all that works. It’s not even a question,” Friant says. “People move their lives forward. They get the jobs and education they need.”

WHICH BRINGS US back to San Francisco and its tech behemoths. So many of them are under fire for privacy violations, disruption of city streets, excessive bro-ness, lack of diversity, encouraging Nazis, and monopolistic practices, they could really use a win. Why doesn’t some oppressed zillionaire come up with a disruptive algorithm to calculate how much money it would take to fix all this, and then cut a check?

Slightly more seriously, if all these companies are going to load tens of thousands of workers into San Francisco skyscrapers and Silicon Beach campuses, how about helping out those communities? Making sure their working-class support staff can afford to live in the city where they work?

For that matter, forget San Francisco and Los Angeles. Santa Clara County—which includes San Jose (California’s third-largest city after LA and San Diego) as well as Apple’s hometown of Cupertino and Google’s headquarters in Mountain View—is one of the wealthiest counties in the country and has the third-highest rate of chronic homelessness.

A little good news here. They’re on it. In 2016, Santa Clara passed Measure A, which allotted about $1 billion to the problem. (At the time, the county had about 660,000 units of housing, of which 340 were supportive. Three hundred and forty.) An organization called Destination Home has become a sort of coordinator of that and other public money, as well as private philanthropy, like a $50 million, five-year commitment from Cisco. “We saw a real role for private capital, where it can be more flexible,” says Erin Connor, public benefit investment program manager at Cisco. “In a lot of cases, just to acquire land to build housing you need to move pretty quickly, and the government of a county can’t move fast enough.”

In Los Angeles, the city’s Proposition HHH in 2016 added $0.348 per square foot to property taxes, and LA County’s Measure H in 2017 levied a quarter-percent sales tax to provide money to fight homelessness—almost $5 billion over 10 years. The United Way and the Conrad Hilton Foundation, among others, have also kicked in, and the Chamber of Commerce was another major supporter. That’s alignment among voters, legislators, policymakers, and the business community—unusual in other political matters, but fighting homelessness has long had bipartisan and widespread support.

Marc Benioff, CEO of tech giant Salesforce, made homelessness a focus of the speech he gave at the opening of the company’s new flagship skyscraper in San Francisco in May 2018. (David Paul Morris, Bloomberg, Getty Images)

In the Bay Area, Facebook has announced a multimillion-dollar commitment to affordable housing. Marc Benioff, the CEO of Salesforce, made homelessness a major part of his speech at the opening of Salesforce Tower, announcing a $3 million donation primarily to a group called Hamilton Families, which has provided services to homeless people for three decades. An organization called Tipping Point has announced that it’s raising $100 million from (thus far) anonymous donors to build supportive housing.

These dollar amounts are still small compared to the problem, but they also don’t come with all the restrictions that federal and state dollars do. Tech company money might come in smaller amounts, over small timeframes, but its donors are more comfortable with experimentation and data-driven solutions. That’s why large aggregator-type organizations have developed to send the various streams of money to the right places. It takes massive infusions of public money to address big, long-term solutions. Private money in partnership can fill in the gaps.

And while Amazon led a recent, bloody fight to repeal a Seattle tax on it and other big businesses for anti-homelessness funds, some tech companies (and the people who got rich running them) have actually tried to build more housing. Those companies big-ticket jobs didn’t cause California’s homelessness and real estate crisis, but they definitely heated it up, and now they’re learning to be a part of much-needed philanthropy..

It turns out they’re not the biggest problem. We are.

People are very good at saying they want homeless people to have homes. Just not, you know, in their neighborhoods. Even when the money’s there, siting a development is expensive, time-consuming, and subject to massive resistance. “Right now it costs $550,000 to build a new unit of housing, and it takes five to seven years to build a new unit of permanent supportive housing in San Francisco,” says Daniel Lurie, CEO of Tipping Point. “So what we’re going to try and do is build a new prototype building in two to three years at a cost of $380,000 a unit, to open people’s eyes that there are other ways of getting things built.”

Sounds great. How many units?

One hundred and fifty, Lurie says. It’ll cost up to $40 million. And they haven’t found a site for it yet.

That’s 150 more people who have access to supportive housing, which means the people who need it can get it, and people who can use vouchers can do that too, perhaps. It’s available in four years instead of seven, and it proves that red tape can be cut.

But fighting homelessness will require thousands of new units. Sure, Los Angeles apparently got everybody on board, and over the past year overall homelessness actually went down in the county for the first time in four years. “But you have to have those same officials supporting the creation of a specific housing project in a specific neighborhood, when the residents are up in arms,” Wilkins says. “Unfortunately, the ‘everybody’ who wants supportive housing is often quieter than a smaller subset of neighbors who say, ‘We agree it belongs somewhere. It just doesn’t belong here.’ Preferably in a fifth dimension. And invisible.”

This is what NIMBYism looks like.

Some residents of the Silverlake neighborhood of Los Angeles want this gas station to be a historical landmark—not apartments. (Google)

San Francisco rules don’t allow multifamily housing in huge swaths of the city, though newly elected mayor London Breed has said she plans to make new home construction a focus of her tenure. Berkeley is famous for exclusionary zoning and resistance to new housing. In Los Angeles, Silverlake residents are trying to get a 50-year-old gas station recognized as a historical landmark to fight plans to build a 14-unit apartment building; in Berkeley the city council is fighting over “view corridors” so that people with homes in the hills can prevent the construction of anything in the flats that might hinder their ability to see a bridge.

THEY HAVE THEIR reasons. Throughout the state, longtime homeowners accrue huge tax benefits thanks to Proposition 13—they pay tax based on their home’s valuation when they bought it (plus an annual increase of no more than 2 percent), so longtime homeowners are sitting on bitcoin-mining levels of earning. The value of those homes may well represent those people’s main source of wealth.

Longtime California residents have seen developers misbehave before, overbuilding luxury units and displacing residents in entire neighborhoods with waves of gentrification. So there are real, valid trust issues. Oh, and people sometimes can’t afford to move, because under Prop 13 rules they’d have to pay taxes on a new valuation, and everything’s too expensive to buy. And, and, and since they can just give the house to their kids, the law creates a kind of gentry, a legislated aristocracy of homeowners who can never afford to sell … in a state where no one is building any new homes. The question is not whether greedy developers should be allowed to build big buildings. The question is who should profit: owners of single-family homes or people trying to build housing?

So when people get priced out of San Francisco or Silicon Valley, let’s say, they move to the East Bay and get funneled into once less-affluent neighborhoods. If those are in, for example, Oakland, they potentially displace the (often poor, often African American) people who already live there, and the problem spreads.

At last we come to the intractable part. The cure is easy to formulate; getting people to take the medicine, less so.

The process of building housing to help homelessness must now rely, in part, on PR. Organizations like the ones coordinating efforts in San Francisco and Los Angeles are developing full-bore marketing plans, figuring out what kind of surrogates make the case best (formerly homeless, now healthy people, yes; chiefs of police and developers, no). Focus groups, learning the right messaging, giving tours—it makes for a slower but ultimately more successful process. So does acknowledging that supportive and low-cost housing often has to be all the more beautiful, full of even more community amenities and architectural frills than a plain old market rate apartment building. People love that stuff.

“Part of the role of philanthropy, private-sector partners, tech companies, or others who are opinion leaders and tastemakers is to change people’s attitudes,” Wilkins says. “Even in really exciting, wonderful, diverse places like the Bay Area, I think people still have a lot of resistance to having very, very poor people and people with mental health disorders living near them.”

The last obstacle to getting affordable housing built, though, might be the hardest one to surmount: race. Homelessness disproportionately affects people of color, particularly African Americans. They’re about 12 percent of the US population, 25 percent of the population living in deep poverty, and 50 percent of the population experiencing homelessness, Wilkins says. Mass incarceration of African American men can leave African American women and children more vulnerable to financial problems, and African American families typically have less wealth in terms of savings and home ownership. Displacement of African American populations from cities means that those people who remain have a weakened family support structure—no nearby grandmother or cousin to go stay with if their finances take a bad turn.

“That’s the dirty part of the stories of vibrancy and all the things people like about cities. I think there’s a lot of folks who, if they were truthful with themselves and one another, would admit that they feel comfortable in cities that have fewer black people in them, and that is heartbreaking,” Wilkins says. “It means people’s tastes for a vibrant, healthy, diverse community have limits that are driven by racism.” (In 1970, 14 percent of San Franciscans were black; today it’s about 5 percent.)

Maybe things are changing. States and municipalities will have to follow Los Angeles’ and Santa Clara’s lead in finding more money for subsidies through taxes and bonds. Earlier this year San Francisco’s state senator Scott Weiner floated legislation that would’ve radically rewritten zoning throughout the state to build denser housing near transit. (Facing opposition from homeowners from the state’s toniest neighborhoods and people defending the poorest neighborhoods against displacement, the bill didn’t make it out of committee.) Other laws actually passed to streamline that multiyear process Tipping Point is trying to disrupt.

The mayor of a residential city just south of San Diego decried increasingly expensive coastal communities that won’t add housing as “mausoleums of the wealthy” and “gilded, apartheid-style communities.” And the vice chairman of the planning commission of the peninsula town of Milpitas quit, publicly, after blasting members of the City Council for sitting on their “fat asses” and not building affordable housing.

It’s not enough. “It’s the schizophrenic politics of the Bay Area,” says Tomiquia Moss, CEO of Hamilton Families. “It’s our progressive values clashing against our desire to preserve our precious environment.”

Let me be even more clear:

When people argue against new construction that changes their “neighborhood character” or makes parking harder, they’re protecting the things about their cities that they love, and in California at least, protecting their investment. But those rationales have the effect of being racist, ageist, and classist. And during a homelessness crisis, they prioritize architectural detail and cars over people’s lives.

Done right, denser cities are an environmental solution. They emit less carbon to the atmosphere, helping stave off global warming. And every infill home is one that goes unbuilt on the edges, preserving rural and open spaces and prevent sprawl.

Because natural disasters, especially climate-change-driven ones, preferentially affect buildings on coastlines and on the borders between urban and wildlands, policies that encourage construction of single-family homes in exurban and rural areas make those homes more vulnerable to destruction.

A lack of homes increases income inequality and poverty. Policies that limit the number of new homes make poverty worse, and they create a less fun city with less support for pedestrians, bikes, transit, and small, local retail.

The debate over whether and how to build all these homes bogs down pretty fast. People both well-meaning and self-interested argue about whether supply and demand actually applies on the neighborhood scale in an overheated housing market. They fight over percentages of affordable units to require in any new development and how tall a development is allowed to be. They clash over zoning, neighborhood character, gentrification, and displacement. All good things for a community to figure out, but in the face of a national tragedy, ultimately noise. Cities change, and scientists know how to change cities to keep the most vulnerable people from dying on the streets.

Walking around Bay Area cities these days, it’s hard not to see ghosts, a spectral psychogeography not of what once was, but what might have been—or may yet be. Every vacant lot or surface parking space could’ve been apartments with street-level shops. Every grassy median amid a wide boulevard makes me hear faint trolley bells, mass transit from an alternate timeline that runs alongside protected bike lanes and stops at pedestrian plazas where there used to be vast intersections.

Denser cities make all those things possible. They’re the keys to livable, walkable, surprising and varied cities, and they make it easier to not have people living on the streets.

People just have to build houses.