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Memories of the 28th Century

Ending Homelessness

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Once again, I find myself returning to this difficult matter. Difficult though it is, I think that it is possible to accomplish, but it will require changes in tax policy and in some business customs.

As we all know, there was an equilibrium in the housing market with respect to incomes until the 1970's or 80's a single person making minimum wage could rent an apartment in most places in the U.S.A., and a well paid person had plenty of money left after housing expenses. The change was not sudden, but between 1970 and the mid 1980's rents had more than doubled, and the prices of single family houses had increased by a similar proportion. During the same period, federal income tax policies had made it easier to move a business overseas, and that led to many people being shut out of the employment market.

A related factor was that the push to close mental hospitals had put a huge number of people out of hospital housing and had them competing for apartments, and the poor farms had been shut down not long before. There were more than enough people pushing demand for housing. Then there is the problem of most real estate salespersons not having a clue about valuing income producing properties. Even their textbooks and licensing exam gets that wrong. (That is from personal experience in Massachusetts and Connecticut.)

There was and continue to be a perfect situation for increasing apartment and single family prices without regard for other economic factors.
Then there is the matter of percentage commissions for real estate sales. Over time, the commissions are compounded, but that would happen even with flat pricing.

At present, we are left with hundreds of thousands of people homeless, and in most cases also lacking incomes. There is one organization that thinks that people should be housed first, and then people can worry about income to pay for their lifestyles, but it would make more financial and practical sense to create jobs for them first and to house them when they will have the wherewithal to pay for the housing.

Creating the jobs would simply require altering federal income tax laws to make it more financially advantageous to have jobs in the U.S.A. than in other countries, and simply allowing only a percentage of labor and other costs incurred outside the U.S.A. to be deducted would accomplish. The downside of that would be that some consumer products would cost more, but they will anyway. The technological problems with the switch back to using U.S. workers would be variable, with much training being necessary with a few industries, while most industries could use people with minimal training. Extensive training is only necessary for specialized jobs, clerical and maintenance people do similar things regardless of where they do them, and there are some industries that have mostly moved to other countries that use relatively untrained people. In the past I worked in the textile industry, and in one place the maintenance crew was composed mostly of people from one family who had mental problems, and some of my coworkers were long time alcoholics who had learned to finish their shifts before they drank and to finish their drinking in time that they could sleep it off before the next morning.

It would certainly be possible to get low end workers who could handle jobs from returning companies, but convincing property owners that the rents they were charging were out of line would be more difficult, because they were necessary for the purchase price. But income tax policy could also be used for that, but it might result in allowable, economic rents being determined and higher rents being treated differently. And it certainly would be necessary to train the agents in valuing streams of income.

The other major factor that would be necessary would be finding homes for the mentally ill. The estimates of the rates of mental illness among the homeless range from 25% to 92%, depending on the population. I am sure that it varies greatly, but I have noticed that between half and two thirds of the homeless that I encounter are mentally ill, especially if one includes drug addiction and mental retardation. Many of those people are incapable of caring for themselves, and a return to the old system of housing the mentally ill and providing minimal treatment would help almost everyone. There are many opinions about how to treat the mentally ill, and that discussion goes far beyond what I am writing here. While alcoholics and drug addicts are mentally ill, many of them are capable of carrying on reasonably ordinary lives, and it was common for them to work full time and have their own homes in the not distant past. It would be possible to get most of the alcoholics and drug addicts working and paying for their own housing, but the remainder of the mentally ill should be in dedicated institutions, where they they might receive some treatment.

A lot of public policy would have to be changed, and tax laws would need to be rewritten, but it should be possible to do those, if the people decide they want to live in a fairer country. While it is undesirable to give any person more than any other, it is desirable to care for those who are incapable of caring for themselves, and many of the homeless are incapable of caring for themselves.

This blog merely scratches the surface of the situation. There is lot more detail about making taxes fairer and less advantageous to moving businesses out of the country And I will confess that I am not knowledgeable about the west coast homeless situation; although the fundamentals are similar to the east coast situation and personnel. I will create additional parts of the plan as time passes.