Homeless People Need Homes — and Money, Too

Analysis by Francis Wilkinson | Bloomberg

Many affluent and dynamic North American cities share a great flaw: high levels of homelessness. But its prevalence in Vancouver is especially striking.

That’s partly because homelessness is both a serious and highly visible problem in Vancouver, where I’ve lived for short periods in recent years and visited last month. And it’s partly because I expect, perhaps naively in this case, to see a higher level of commitment to collective well-being (and less resort to punitive catharsis) in Canada than typically exists in the US.

Like other cities, including Toronto, Vancouver has deployed many strategies to address the problem, from a focus on health care and drug treatment to temporary modular housing and tiny shelters for the homeless. There was a foreign buyer’s tax and an empty homes tax. There was an investigation into whether money laundering and corruption were behind the persistent rise of Vancouver real-estate values.

Currently there are proposals to change the property tax structure and to grant incentives for high-density housing. And one community organization is actually handing out cash, no strings attached, to carefully screened homeless people and tracking their progress.

But the problem persists, with small encampments on downtown sidewalks and one neighborhood — Downtown Eastside — that has for years been inundated with homelessness and high incidences of mental illness and drug abuse. Other cities have more homeless people, but few have such a high concentration as Vancouver does in the Downtown Eastside, where hundreds of people, many in obvious distress, occupy sidewalk space. The area around East Hastings Street may be the most chaotic city blocks I have seen in North America.


In the US, leaders in many stereotypically liberal cities have lately made a show of frustration with their own homeless citizens and the encampments where many congregate. In December, for example, San Francisco Mayor London Breed implicitly linked homelessness and crime when, in an address about a promised anti-crime initiative, she cited rampant homelessness, including people living in tents. “We are past the point where what we see is even remotely acceptable,” Breed said.

San Francisco is more of a leading indicator than an outlier.

Los Angeles, Portland, Seattle and others have also clamped down on homeless camps this year, and the political rhetoric has grown more harsh.

Vancouver has the profile of a homelessness incubator. It consistently has the highest rents in Canada (more than C$2,200, or  about $1,671) for a one bedroom) and the housing supply is notoriously limited, not only by economics and development trends but by the water and mountains that encircle the city. Wealth abounds: Single-family homes, of which there are many, in nice neighborhoods, of which there are also many, go for millions.

The city seems to confirm the thesis that homelessness is driven first and foremost by the high costs and inadequate supply of housing. So I was surprised when I sat down with a longtime activist in Vancouver who wanted to focus attention on other factors.

Heather Hay is the acting CEO of Foundations for Social Change, a nonprofit organization currently running a pilot program that provides cash transfers to 200 homeless people in Vancouver. (The group is also following a control group of another 200.) The project grew out of a smaller test of cash transfers that yielded positive results.

“My background is working with marginalized populations,” said Hay, a registered nurse who led a health and safety initiative for 15 years in the Downtown Eastside. “In Vancouver, when everybody thinks of homelessness, they think of the Downtown Eastside.” 

When Hay’s organization began looking for potential clients for cash transfers, they screened for a range of issues. “We were looking for individuals who had no complex mental health issues, no misuse of drugs or alcohol and no significant gambling issues,” she said. In other words, people who could “make appropriate decisions for themselves.”

Hay likened screening the homeless population to searching for a needle in a haystack. “When they did the pilot project, they interviewed over 780 people to get a sample size of 115,” she said. The vast majority of interviewees failed to meet the criteria because the Downtown Eastside, she said, is “over-representative of people with complex mental health and addiction issues.”

Vancouver’s point-in-time count in March 2020 found almost 2,100 homeless in the city, with almost half in the Downtown Eastside. Many outside the Downtown Eastside don’t exhibit the kind of behaviors that are prevalent there. Even so, Hay remains skeptical that the much-vaunted “housing first” approach can actually solve homelessness. “In the pilot project, many of our participants were working three or four jobs, and the reason they defaulted to the street was because they lost one of those jobs. Or else it was because their car didn’t work, and it was a huge expense,” she said. “For some populations, we need to give people money.”

Of course, lack of money for rent is one way a lack of money manifests itself. In an expensive city, the resulting struggle leads to people “white knuckling it on the edge,” Hay said. The more time a person spends unhoused following a financial or other setback, the more likely they are to fall prey to mental illness, drugs or alcohol.

“So I think, yeah, we could throw housing at this problem,” Hay said. “But I don’t think housing is going to address the overarching issue.”


Gregg Colburn is an assistant professor of real estate at the University of Washington, a post he obtained after he made a mid-career shift from high-level finance to academia. His view of homelessness is clear from the declarative title of a book he co-authored: “Homelessness is a Housing Problem: How Structural Factors Explain U.S. Patterns.”

“When you look at regional variation and rates of homelessness, the places with high rates of homelessness don’t have more poor people. They don’t have more people who are addicted. They don’t have more people who are mentally ill,” Colburn said.

Colburn’s argument about homelessness has the same basic parameters as a familiar analysis of American exceptionalism in firearm homicide rates. Europe, for example, doesn’t have fewer people with mental illness than the US. It generally doesn’t have lower rates of nonviolent crime. What Europe has are fewer guns; that’s why it has less gun violence.

Colburn similarly points out that many troubled cities have worse problems than L.A., Seattle, Vancouver and the other cosmopolitan places with high rates of homelessness. But what those troubled cities don’t have, Colburn said, is a housing crunch.

Seattle doesn’t have a homelessness problem because we have more people who are mentally ill. Now, is mental illness a cause of homelessness? Sure it is. But there are mentally ill people in Detroit and Chicago and West Virginia and Arkansas and all these places. And they don’t have near the problem that we have.

And when you think about drugs, the places with some of the most acute drug problems in the United States, like Arkansas and West Virginia, where the opioid epidemic has just ravaged communities, they don’t have homelessness problems. And so if drugs are really the big driver here, we should see a massive homeless population in Arkansas and West Virginia. We don’t. In fact, there are really, really low rates of homelessness. 

Low-income residents of Seattle have no margin for error in the relentless struggle to afford rent. If the car breaks down, or they have an extended illness, they could be sunk. Climbing back into the ranks of the housed is also more difficult.

“The other problem is the vacancy rates are just razor thin,” Colburn said. “Even if you might have some resources, if you lose your housing, finding another place is really, really hard. So it doesn’t take a lot for someone to be in an OK place, lose a job, have an unexpected expense, lose their housing, and then pretty soon they’re in the system and, you know, getting out of that system’s really hard.”

To Colburn, the distinction between Seattle and cities with high poverty rates is telling.

Detroit has the highest poverty rate in the country by far. Cleveland has very high poverty rates. St. Louis, Baltimore — all those places have really high rates of poverty, meaning the percentage of people below the federal poverty line. And they have very, very low rates of homelessness. Seattle and San Francisco are two of the most affluent cities in the country. So are there poor people in Seattle? Sure there are. But as a percentage of the total population, the percentage of people below the federal poverty line in Seattle and San Francisco is really, really low, right? In fact, we have relatively few poor people. But the consequences of being poor in a market like this are really severe. That’s fundamentally the problem.

Creating more affordable housing is difficult — at least it appears to be based on mostly meager results in all sorts of places. As my colleague Justin Fox points out, Minneapolis recently relaxed its single-family zoning laws to encourage the kind of medium-density construction that housing activists applaud. The rule change has not yet produced much in the way of actual housing, however.


Handing people cash to support themselves may be a more promising route. But if the Foundations for Social Change pilot program is any indication, it’s also highly dependent on the kind of people who receive the cash.

I asked Hay what her ideal menu of policies would be. None was very shocking. Legalize drugs in order to eliminate the criminal incentives endemic to homeless groups of people, she said. Or provide the kind of comprehensive “therapeutic community” that could help some of the regulars around the Downtown Eastside to escape their trauma.

In one previous incarnation of Vancouver policy, Hay recalled, housing was provided to homeless individuals along with varied levels of services, ranging from comprehensive “Cadillac” social services to basic housing. “The folks that were in the Cadillac, with the highest level of support, absolutely fared better, and had more sustainability to be able to move on,” she said. “Just putting the control group in place, in housing, didn’t accomplish much.”

One thing she knows from countless conversations with homeless people, she said, is that many wish to be elsewhere. “We know that a lot of people don’t want to be there. So why don’t we ask them, ‘Where do you want to be?’ and help them move where they want to be in some kind of supportive housing?”

Ultimately, Hay said, improving the situation is a matter of public will. “Why don’t we just have a policy that is zero tolerance for homelessness?” she asked. “Instead of enabling and continuing, we could just adopt a policy.”

Hay’s suggestion sounds both simplistic and impractical. But she may be articulating the only course with a chance of lasting success.

Canada does a vastly better job preventing gun violence than the US does not because it brings more financial resources to bear but because it has more social, moral and political capital devoted to making sure its people are not targets. It has, in effect, zero tolerance for gun violence. The US, by contrast, has an exceedingly high tolerance for gun violence — and eight times the per capita firearm deaths that its neighbor has. If Canada cared as much about reducing homelessness as it cares about preventing gun violence, then Americans might have something else to envy about their neighbors to the north.

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