California Housing Prices and Homelessness

At first glance, it seems clear why California has such an unequal number of homeless Americans. Accommodation in California is very expensive. But why should expensive housing be homeless? If Nome, Alaska homes are as expensive as Los Angeles, will Nome have homelessness like LA?

Commentator Kalinis There was an interesting comment about the housing situation in California. Here is a quote, though you may want to read the whole comment, which makes some other interesting points:

Not all low-income people are pushed out because there are so many poor people in California, but the poor have to work very hard to pay rent in California and serious social problems (drugs, addiction, mental illness, crime) only have to be paid out of state. Since they do not want to work extra for the rent. The poor in California who live on higher rents are far more law-abiding and more pro-social than them. Therefore, the more excluded zoning, the more desirable the location. The opposite is true of cities becoming cheaper, social problems create a negative loop in demand as cheap rents rise. . . .

That’s why the homelessness problem in California is so bad. California not only enforces the rules too much, but is also relieved by the fact that high rents keep enough people out of trouble so the state’s social situation is better than average (crime rate in TX is higher CA). Homeless people can avoid high rents completely, so lack of application becomes a defining factor, which is why the state has such a serious problem.

Thus expensive housing and homelessness are connected, but not because the homeless cannot afford housing. Rather interpersonal relationships occur because the homeless in expensive areas There is no market for housing. For the homeless, the relative cost of living on the streets of Los Angeles (related to an apartment) is much lower than the relative cost of living on the streets of Arkansas. So it would be reasonable for a homeless person to move from Arkansas to LA.

There is a more intuitive way to see the point here. Ask yourself why housing is so expensive in California. There can be many reasons, but a combination of good climate, well-paid jobs and construction barriers is probably the main reason. Probably a lower crime rate than Texas. But in a sense it doesn’t matter what the cause is; The high price tells you that California is considered a very desirable place to live, marginally.

So why don’t the poor Arkansas people who currently live at home move there? Because they will be homeless. But homeless people in Arkansas are already homeless, so they benefit from all the positive factors that make LA a preferred place to live, without the hassle of paying a high price for an apartment.

You may respond that while California has a beautiful climate, all those well-paying media and technology jobs are of no value to the homeless. Not so. The same reason that makes housing really expensive in California makes it easier for the homeless to find some money. A richer place has higher wages in more public welfare, more personal charity, and part-time low-skilled jobs. Some of those assets actually “go down.” These financial benefits are small comforts for working class people who cannot find a reasonably priced home in LA, but a real benefit for the homeless who are not paying the mortgage.

I am in favor of the YIMBY policy in California, but they will have a very limited effect on homelessness.

PS This argument may seem insensitive, as I claim that the homeless are benefiting from “free street housing” in LA. I understand that they are often hunted and are subject to cold weather at night. I probably won’t even survive. The question then arises as to whether the negative factors related to being homeless in LA are worse than being homeless in other states. I’m no expert on the subject, but there is probably a kind of balance where the growing number of homeless people in California eventually makes street life unwanted enough to stop further outflows.

PPS. I don’t think this model provides a complete explanation for the California population. The average income of both African Americans and Hispanics is slightly lower. California’s black population is declining, which is consistent with this model (keep in mind that the vast majority of poor people are not homeless) but its Hispanic population is growing. So there are a significant number of poor and working class people who are willing to live in California (at home) despite the high cost. The price of the house The Hispanic regions of southern and eastern LA (or Orange County) are quite high by national standards, although low by LA standards.

I do not claim that working class Hispanics can afford those expensive houses. The fact that some were bought at a lower price in the past cannot be explained by the fact that some newly sold homes have retained the market. And it may not be all due to gentrification; Parts of the broader working class in LA County are larger than the relatively small area affected by politeness. There are 4.8 million Hispanics in LA County alone, almost the same Total Harris County, Texas, is the third most populous county in the United States. Picture all of Houston and its suburbs – it’s just Hispanic Neighbor Of LA

As always, more research is needed. . . .

PPPS. The parts of LA are amazingly beautiful. See four pictures Nolan Gray tweets.

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