As I predicted just several months ago, there are numerous calls for government intervention to fix the affordable housing crisis. Most of these solutions consist of more subsidies and even price controls that do little to address the fundamental problem and relatively easy solution. Instead, most of them make the problem tougher. But even I was unprepared for the lunacy coming out of California. They have such out-of-control housing costs that contribute to homelessness that they are debating “safe parking.”
Since there are over 16,000 homeless people in Los Angeles, safe parking sites are designated places where people can park their cars—their temporary homes in places that have security and some measure of order and safety. Helping the homeless sounds like a noble goal but the problem here is a government program designed to solve problems (and spend money) created by a government program.
The housing crisis is worse in California because they have gone the farthest down the rabbit trail of making it expensive. What politicians due is artificially limit supply at the same time demand increases. They don’t come out and say consumers will pay a million dollars for a burned-out shack, they instead say they are preserving nature, preserving the quality of neighborhoods, and providing for smart growth. The end result is a bevy of regulations that make it expensive and slow to build new units.
Then they compound the problem with bad “solutions” to affordable housing. These include mandating a certain amount of units in buildings or neighborhood. The affordable units remove inventory from existing stock. In other words, they further restrict supply in the face of increasing demand. If you are one of the lucky ones to win the lottery and get an affordable unit, the low rent is really nice. But even then, rent-controlled apartments mean that people stay in them much longer than they would without such features. Like when kids grow up and leave home, many people downsize in normal markets but stay in rent-controlled units which restricts the supply of available units. On top of that, even affordable units in California are way more expensive than free market alternatives in other states that haven’t created this problem.
So politicians created the affordable housing problem in the first place, offer solutions that only made the problem worse, and now they are creating yet another government program to fix those problems. The program is administered through tax dollars which will only increase taxes on hard-working families. (Here in Nevada we already pay one of the highest sales taxes in the country but they want to increase it even more to pay for homeless programs.)
Not only do they indirectly punish tax payers in general, but these are essentially creating new homeless shelters (and the mass of disease and crime that occur around them) near businesses that also pay taxes. Or they try to legalize permanent parking which penalizes the hard-working people who pay for a place to stay. But in the name of compassion and the government fixing problems they created, they will allow somebody with no water and sewage to park in neighborhoods.
If they wanted to get serious about solving the affordable housing crisis they would do things that increase supply to meet demand. This would mean streamlining regulations, stop mandating costly solar panels on houses, open up new land to development, ease zoning regulations, and stop the not-in-my-backyard rhetoric. This would do more to actually help people than government programs that only exist to solve problems stemming from government programs.
