Government makes poverty expensive

Dr. Helen links an article in USA Today I found horrifying. Government-run homeless shelters (places that basically provide people with a cot to sleep) end up costing more than it would to rent private housing. Much, much more:

Cities, states and the federal government pay more to provide the homeless with short-term shelter and services than what it would cost to rent permanent housing, the U.S. government reports.

A study of 9,000 families and individuals being released today by the Department of Housing and Urban Development finds that costs to house the newly homeless vary widely, depending on the type of shelter and social services provided by the six cities in the report.

Emergency shelter for families was the most costly. In Washington, D.C., the average bill for a month in an emergency shelter ranges from $2,500 to $3,700. In Houston, the average is $1,391.

Many communities probably don't know that they are spending as much "to maintain a cot in a gymnasium with 100 other cots" as it would cost to rent an efficiency apartment, says Dennis Culhane, a University of Pennsylvania professor who studies housing policies. "We are paying for a form of housing that is largely substandard, and we are paying as much, if not more, than standard conventional housing."

Whenever the government runs anything, it's like a blank check, and accountability disappears. Unlike private employers (who are hemmed in by the bottom line) the government can hire as many people as it wants (often this is grounded in political patronage -- payoffs for campaign work), the employees have total, unionized job security, and they agitate constantly about the need to increase their numbers. So government grows and grows. "Sustainability" is for chumps in the private sector.

An article in the Wall Street Journal discusses the problem in detail:

It turns out there really is growing inequality in America. It's the 45% premium in pay and benefits that government workers receive over the poor saps who create wealth in the private economy.

And the gap is growing. According to the U.S. Bureau of Labor Statistics (BLS), from 1998 to 2008 public employee compensation grew by 28.6%, compared with 19.3% for private workers. In the recession year of 2009, with almost no inflation and record budget deficits, more than half the states awarded pay raises to their employees. Even as deficits in state capitals widen and are forcing cuts in services, few politicians are willing to eliminate these pay inequities that enrich the few who wield political power.

And (via Glenn Reynolds) Reason has more.

So, horrifying though it is, it really shouldn't surprise anyone that homeless shelters cost far more than renting an apartment would.

Back in the old days (like when I was a kid), housing for those we now call homeless was provided in the form of "flop houses." Usually located in areas of cities collectively known as "Skid Row," these places would offer low priced rooms or even cots for a dollar a day or less.

In the 1950s, transients living outside the family unit tended to be concentrated in the poorer districts of the city where there were cheap hotels and restaurants, bars, religious missions and casual employment agencies. The current notion of "homelessness," based on the absence of shelter, did not strictly apply here, as most of the poor could readily find shelter in rooming houses, cheap hotels, or other forms of substandard housing ("flophouses"). In fact, only a small minority of the "transient" population actually resorted to sleeping on the streets.
By the end of the 1970s, the flophouses were gone, and their former denizens were living in the street.

As to why landlords wouldn't run flophouses today, the reasons are obvious. Strict building codes won't allow them, and the tort law system encourages anyone (including the residents and neighbors) to sue for almost anything. Especially "substandard housing" (which is by definition virtually illegal).

Years ago, Donald MacDonald (a liberal San Francisco architect) came up with what I thought was a good idea -- building small, weatherproof, lockable sleeping cubicles which could be set up anywhere and moved easily. It got a lot of press until someone thought to run the idea past Codes and Inspections. It was totally illegal, of course, so it went nowhere. (But exposing people to the elements meets code, doncha know.)

And naturally, problems created by government can only be solved by government. So the taxpayers should foot the bill for government-run flophouses that cost a hundred times more than private flophouses used to cost.

Poverty should be made as expensive and as permanent as possible.

Get used to it.

posted by Eric on 03.30.10 at 11:52 AM


It generally costs government more to take care of one person in "poverty" for a year than the average self supporting family spends. (ATTER TAXES(

Hugh   ·  March 30, 2010 12:23 PM

It generally costs government more to take care of one person in "poverty" for a year than the average self supporting family spends. (ATTER TAXES)

Anonymous   ·  March 30, 2010 12:28 PM

I think we can fairly assume the cost of health care will go up accordingly, while the quality goes down.

Eric Scheie   ·  March 30, 2010 12:32 PM

Now you see why I'm rooting for an asteroid?

Veeshir   ·  March 30, 2010 8:19 PM

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