Tag Archives: Homeless Spending

City’s Numbers On Homeless Costs Don’t Add Up

By Bill Oakey, June 29, 2022

I took a big gulp when I read the American-Statesman article about the “funding shortfall” of $93 million for housing the homeless. The article says the City has established a mind-bogging $515 million price tag for housing Austin’s homeless over three years. There is a big push to find corporate donors to cough up the $93 million. But, as you will see, their numbers don’t add up.

For starters, you can’t take all of the homeless people off the streets and put them into a home! Too many of them have serious substance abuse and mental health issues. Experience has shown that many (but not all) of these impaired individuals cannot maintain a home properly. Some will even refuse to be placed in a home.

I mention this, not for any lack of compassion, but for the sake of practical reality. The situation simply is what it is. What the City should be doing is raising large sums of money for mental health services and substance abuse rehabilitation. That should be a major component of the homeless solution plans.

Let’s Take a Look at the Math

Regardless of the merits of any of this, the City’s numbers do not add up. The City wants to build 1,300 housing units. The Statesman article suggests that with recent construction cost increases, a typical apartment unit would cost $275,000. So, let’s put a little cushion on that, and bump it to an even $300,000. Here’s how the math comes out:

$515,000,000 Total fundraising goal
    -93,000000 Alleged shortfall
$422,000,000 Available to spend

$300,000,000 Cost per housing unit
           X 1,300 Housing units needed
$390,000,000 Actual amount needed

$422,000,000 Available to spend
 -390,000,000 Actual amount needed
  $32,000,000 Left over, WITHOUT including the $93 million “shortfall”

Now, let’s look at it another way. Suppose they did raise the additional $93 million. Here’s what would happen:

$515,000,000 Available to spend
            / 1,300 Housing units needed
$396,153,846 Cost per unit

The City’s fundraising goal would provide roughly $400,000 per newly built housing unit for the homeless. That is a whopping sum of money for a very risky proposition. It assumes that all 1,300 of these folks could, or would, actually live sustainably in their own homes.

I would expect City officials and homeless advocates to do an artful dance around these numbers. They will probably mention administrative costs. Well, I can’t imagine those adding up to the $32 million left over without the shortfall, or the full $125 million, if you tack on the $93 million.

Perhaps they are allowing for other homeless services besides housing. If that’s the case, then it brings up a huge problem with the City’s lack of transparency to the public. Where in the &@#!!_&$#! are these giant mountains of taxpayer money and private donations for the homeless actually going?? What are the metrics? 

At the very least, we deserve to see answers to these basic questions:

1. How many homeless folks have been settled into housing in the last five years?

2. What is the annual budget for cleaning up homeless camps? Is there an upcoming  budget plan for providing sufficient staff to keep these camps clean and sanitary?

3. What is the annual budget for providing substance abuse rehab and mental health services for the homeless? What are the recent annual metrics for the numbers of people successfully treated with these services?

4. Does the City have a specific policy and the necessary staff to ensure that local businesses and homeowners are sufficiently protected from homeless crime?

5. What are the metrics for resolving issues of homeless crime? How many people have been arrested per recent year? What are the City’s policies for making arrests for homeless crimes? What are the specific metrics for prosecutions, prison time served, probation granted, release without prosecution, etc.? Is there sufficient accountability imposed on homeless folks who commit crimes to discourage these offenders from doing it again?

When all of these questions are satisfactorily answered, I sincerely believe that the public and potential corporate donors will show their compassion, and be much more willing to get on board with an aggressive plan to deal with our homeless dilemma.

What Are the Requirements to Get a Free Home?

This question is not intended to reflect badly on the unfortunate folks who lose their jobs, while facing devastating medical issues they can’t afford, and find themselves out on the street. Certainly, these folks need public services. But a program that offers free homes, valued at hundreds of thousands of dollars could become very tempting. What would prevent a fraudster from storing their belongings with a friend, and pitching a tent to become “homeless?” Or, what if a group of folks facing 30% or 40% rent increases, decided to stay in Austin and try to qualify for free homes? How will the City determine who is legitimately entitled to this grand prize of a benefit?

At first glance, this question might seem preposterous to longtime homeless advocates. If so, that just proves my point about the need for transparency. Will some of the newly constructed homes be intended only for transitional housing? Can we assume that the folks have to either buy the home, rent it or move out, if they get a job and become self-sufficient? Or, are they allowed to keep the free homes for life? Will these free homes come with a Federal tax liability, like the cars that were once given to Oprah Winfrey’s audience? The public needs to know, and we haven’t been told.

There Is a Big Shortfall, But It’s Not Financial

The City’s thinking falls far short of where It ought to be. Austin has a broad range of critical needs. In all of our history, major endeavors costing hundreds of millions of dollars have been debated, discussed and decided with significant public input. Major  projects have often required months, if not years of community involvement before we came together to approve them. On the homeless issue, our City leaders have made huge financial commitments, without large-scale community input. Discussions were held, of course, but not to the extent that we know many details about how the money is being spent. Or whether the public is comfortable with the vast amounts being spent. We haven’t seen any metrics on the progress made to house the homeless, or address the mental health, sanitation and public safety components of the issue.

Austin has a major affordability problem that impacts every neighborhood. We have a lopsided, tech-based economy that has created an income inequality crisis. It threatens our diversity, and is probably not economically sustainable. The Project Connect transit plan is spiraling out of control, with ballooning cost projections. Its odds of actually being completed, with miles of tunnels and a split-level underground fantasy land are slim to none. And we face a climate change challenge that threatens our quality of life, including severe wildfire dangers.

Bottom line – $515 million is a staggering sum to put into a single basket among all of our critical needs. Especially, without transparency and community consensus.

A Parting Thought

If and when the City finally decides to provide some transparency, I would urge them to reinforce their assumptions about the viability of their homeless initiatives. Please show us some examples of other cities that have a prove record of success, using the approaches that our taxpayer dollars will be funding. Let’s hope that the outcome looks better than what we see in San Francisco and L.A.

Musical Accompaniment for This Blog Piece:

  1. “Someone’s Child” – Matthews, Wright & King
  2. “Ain’t Got No Home” – Clarence “Frogman” Henry
  3. “Green Green Grass of Home” – Tom Jones
  4. “Sloop John B” – The Beach Boys
  5. “Detroit City” – Bobby Bare
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