If Los Angeles were to place their whole population of those experiencing homelessness in transitional housing, the cost would be around $2.8 billion a year. Throughout the state, that cost would exceed $6 billion. The boost in rent prices across California is making it even tougher for those suffering from homelessness to find affordable housing. From housing prices to government requirements and added labor costs, programs that are attempting to construct transitional housing are having a difficult time getting the necessary funding.
Those who had trouble keeping up with rent would usually gain benefits by living in subsidized housing, but that has changed. In 2016, there was an adjustment to federal policy that gave more funding to Housing First programs than transitional housing, which usually enabled those enduring homelessness to go to school and get a job before they found a home of their own. Transitional housing only required tenants to pay a certain percentage of their income on rent, which would help them get by and give them a safe place to stay. The U.S. Department of Housing and Urban Development shifted to fund programs that focused on Housing First because it was thought to be more effective. However, this change gives less funding to programs that offer transitional housing. It was put into effect so the government could claim a lower population of those experiencing homelessness, because individuals living in transitional housing are still technically enduring homelessness. While Housing First does focus on getting individuals who experience homelessness out of a shelter, it does not mean those houses are safe and it does not undertake the causes of homelessness. Many advocates for transitional housing were up against Housing First and were defeated, which gives those experiencing homelessness less resources. With less transitional housing available, many in need make difficult and life threatening decisions, for example staying in a home with an abusive partner.
With housing becoming more expensive and more scarce, this has a negative impact on those experiencing homelessness. The problem is that those who are making lower wages can not keep up with the increasing rent prices. It makes it even more arduous for those suffering from homelessness to gain permanent housing. In an article titled, “Rising housing costs out of reach for people transitioning from homelessness,” by Courtney Friedman, an AT&T employee named Anthony Wolfe, who is staying in a shelter is having trouble even with receiving assistance and stated, “it’s just crazy because apartments want you to make three times the rent.” For those making minimum wage, when their rent goes up $100 or $200 a month, it is just not manageable. While funds given to programs through Covid response helped those struggling to receive housing, those resources are now on the decline and more funds are needed to keep up.
One example of inflation harming housing projects is Proposition HHH. Proposition HHH won the vote in 2016 to create 10,000 affordable housing units in Los Angeles, over a 10 year time-line, but so far it is not working out as planned. As housing prices are on the rise, it makes each unit even more expensive than it was when the proposition was first passed and so far only 8,000 of the agreed 10,000 units have been processed. The average per-unit cost has increased almost double from its original estimation of $375,000 in the last couple of years. A former city and county executive, Miguel Santana, noticed many problems that would make the project difficult and worried this would make it harder to get public support for future projects that involve building housing for those experiencing homelessness. The cost of construction is ultimately too high and the progress is too slow to help those in need. Even with the $120 million set aside to find the proposition it may not be enough to finish the project.
California has some of the highest costing government subsidized housing in the country, with a housing project in Solana Beach reaching over $1 million per-unit. The pandemic has only worsened the issue by creating more individuals suffering from homelessness. Supportive housing units are basically studio apartments that are around 500 square feet and because of the increase of rent across the state, the fees are adding up. The high cost is also because of prevailing wages, which means you can pay laborers no less than they would receive for private work. According to the article, “The Real Cost of Permanent Supportive Housing for California’s Homeless,” by Thomas Buckley, prevailing wages were, “put in place to ensure government contracts were not given out to purposefully lowball bidders.” Therefore, the labor costs increase about 30 percent higher than private sector pay. While the rent to residents in supportive housing is less than the cost, to make it affordable for those experiencing homelessness, they also receive supportive services on top of that. With the value of the property increasing, it puts stress on all those other services that are needed to give transitional housing to those suffering from homelessness. The real issue of the matter is if transitional housing will be able to survive with prices constantly increasing.