Is the Federal Government Misdirecting Homelessness Funds?

By | Nov 19, 2012

Slide Rule Approach vs. iPad ApproachSometimes creating solutions to difficult problems just requires a bit of common sense.

If you need to reduce credit card debt, design a personal budget where you spend less than you earn. If you want to lose weight, create a diet where you burn more calories than you consume.

On a national level, the same concept holds true.

Take one of this country’s most deplorable current social issues: homelessness. The federal government distributes about $1.5 billion per year in financial assistance in order to address homelessness around the country through Continuum of Care grants.

Common sense suggests that the government should invest these funds in the communities where homelessness is most acute. But are they doing that? Sadly, no.

Just look at Los Angeles County. This region has more than 50,000 people experiencing homelessness, which is just over 8 percent of the total homeless population in the country. Common sense would dictate that this community should receive 8 percent of federal homelessness resources.

But, in this case, common sense does not prevail. In 2011, Los Angeles received $75 million to help its homeless population. That’s 5 percent of the total federal allocation.

Why? Are these federal officials who live in freezing winters just jealous of Angelenos and their temperate weather? Perhaps their justification is that homeless individuals are better off sleeping on the white sands of Southern California’s beaches than the frozen, concrete sidewalks of New York City?


Actually, the distribution formula is not based on bias against homeless Southern Californians. The

allocation is based on a formula created by pencil-sharpening bureaucrats 25 years ago.


That’s correct, the federal government is determining where homelessness is most prevalent based on a 1987 mathematical equation. Back then, a gallon of gasoline was 89 cents, a postage stamp cost 24 cents, and the average monthly rent was $395 (without rent control)!

I can just imagine some white collar government accountants with thick glasses and plastic pencil holders in their shirt pockets creating Soviet-like ten- and twenty-year projections for where federal dollars should be allocated in order to help the poorest of the poor.

They used variables like population size, poverty rates, population growth lag, and

number of housing units built before 1940. These numbers were probably great poverty indicators in a time when the price of a house was the same as the price as one of today’s luxury cars.


But, since homelessness is so much more complicated today, those old formulas just don’t work.

Today, we need a new way of allocating federal resources toward ending homelessness. Instead of a slide rule (if you even know what that is) approach, we need an iPad approach to distribution.

We need to look at communities that are filled with poverty, overwhelmed by overcrowded housing units, and have a shortage of affordable housing. Advocates around the country are promoting this simpler, more transparent formula.

It will work for today’s world, though in 25 years yet another new approach will likely need to be developed, or the advocates of 2037 may well look at us as old, out-of-touch iPad-toting bureaucrats.


Photo by dudegalea.