Facing the True Causes of Homelessness
by Jerome F. Winzig
At 7:30 on a weekday morning, the Chicago Avenue bus to downtown runs past a Catholic Charities homeless shelter. The ground floor seems to be a lunchroom or cafeteria, and every morning it's filled with people eating breakfast. Many of them seem to be adult males, but the glass is tinted, so it's hard to tell for sure. A couple of days ago, however, it was warmer, and several women and children were standing outside.
As the bus passes on, the contrast between the people eating breakfast there and those going to work on the bus is puzzling. The bus carries a real mix of people, including night workers from the Mall of America who are dozing on their way home. What has happened in the last thirty years to create a gulf between those of us on the bus and those in that shelter? What has made homelessness a common -- and worsening -- phenomenon in cities across the United States?
There are many politically correct explanations that fail to get at the heart of the problem. Some believe that homelessness is the result of government's failure to take care of the needy. But this does not explain why homelessness was not a major problem before Lyndon Johnson's "Great Society" and the increase in social spending that followed.
Others want to blame "Reagonomics." But the rise in homelessness began long before President Reagan took office, and he left office seven years ago. Besides, most of the world's industrialized democracies also seen a rise in homelessness.
Other potential culprits include "greedy" corporations, whom some feel aren't willing to pay entry-level workers a "living wage." However, many companies offer entry-level wages that are well above the minimum wage. Making corporations the villains also ignores the fact that many non-profit organizations also pay low wages to unskilled workers. In addition, many low-wage jobs are filled by teenagers who, unencumbered by financial responsibilities, have more disposable income and spending money than any youthful generation in history.
This is not to say that low-wage adult workers are not a serious societal problem. In an economy that is increasingly technology-based, there is a serious and growing gap between those who have marketable skills and those who do not. Nor should we conclude that there aren't people going through major crises in their lives -- crises that imperil their livelihoods. But the homeless problem began to get really serious before our economy began its technological shift, and in years past personal and family crises did not land people on the street in large numbers.
Homelessness is now so endemic and widespread that we need to dig deeper for causes, including those that we may not want to face. We should ask four basic questions.
The first is why rental housing is so costly today and why there is not enough of it. There are several reasons. The federal income tax deductions for home mortgage interest and property taxes are significant breaks for many middle-income Americans. However, when we subsidize homeowners, we encourage them to use a disproportionate share of the housing stock. The average size of new homes has been increasing for years, and it is no longer uncommon for single people to own multi-bedroom homes instead of renting smaller apartments.
Furthermore, many state governments subsidize local property taxes for homeowners. In Minnesota, the homestead tax credit for homeowners means that property taxes on apartments are 250 percent higher than on owner-occupied houses. This increases apartment rent and means that people who qualify for a home mortgage can often buy a home for less money per month than those who cannot qualify can rent an apartment.
In addition, there has been a significant effort in most communities to increase housing standards and stiffen zoning restrictions. Urban renewal has gotten rid of much substandard housing. Most people don't want single-resident-only (SRO) housing located near them, so the number of SRO units has decreased. While no one want dilapidated and substandard housing, we should at least ask ourselves if too much diligence on this score is depriving people of needed shelter.
The second question we should ask about homelessness is why, aside from price, more people find it hard to afford housing today. While the media tends to dismiss complaints about taxes, it is apparent there has been a sea change in the level of taxation in the United States. Since 1955, the average family's total federal, state, and local taxes have more than doubled as a percentage of income. In addition, the social security/Medicare tax rate has gone up by 510 percent since 1955. This is particularly troublesome, since it hits low and middle-income workers the hardest, leaving them with less disposable income and hampering their ability to obtain housing.
The third question to ask is why so many dysfunctional people now live on the streets. Over the last several decades, mental hospitals across the country have been closed as laws and court rulings made it increasingly difficult to commit people to mental institutions involuntarily. While some mental hospitals were terrible places, many were not. Those of us who have had personal experience with a family member committed to a mental hospital cannot understand why today it is preferable for that vulnerable adult to sleep outside under bridges or in doorways.
The fourth question is why, in a an economy that obviously requires more technical skills, we still have so many unskilled workers. Some answers are obvious; not everyone has the ability to handle skilled occupations and there has been an increase in immigration. However, immigrants do not seem to make up much of the homeless population, and there are other causes. Our high school dropout rate is unacceptably high, and is even worse among children of color. Perhaps it is time to question a popular culture that disparages academic achievement and does not encourage making sacrifices to get an education.
If we are going to undo this terrible problem of homelessness, we have to stop chasing the wrong causes and look at substantive reform in many areas instead. Reducing overall taxation levels would help. Drastically simplifying our tax code would reduce our dependence on home mortgage deductions, property tax subsidies, and other tax breaks that give preference to homeowners over renters. Significantly reducing our social security tax rate would eliminate a back-door income tax on lower-income Americans. Reexamining zoning restrictions and redevelopment efforts might save some inexpensive housing. We need to revisit misguided social policies that house dysfunctional, vulnerable adults on the street because they allegedly are no threat to themselves or anyone else. Lastly, we need to change our cultures and our schools so that all students achieve basic skill levels, graduate from high school, and are encouraged to go on to college or technical school.
Such fundamental reform is not likely, however. The media will not cover such a conservative answer to a social problem and many of us do not want to forgo any of our current privileges. But spending more money on housing is a stopgap measure that is doomed to fail. It will not empower people by giving them choices and letting them keep more of their money to use on housing. Furthermore, it requires more money and higher levels of taxation. This year, because of protests by people who believe they are advocates for the homeless, the city of Minneapolis is beginning work on a new mixed-income housing project for 900 that will cost well in excess of $200,000 per unit. That's crazy. And oh so very sad for people living on the street.