-Image by -LewiZ per Pixabay
Despite the terrible toll which the pandemic has taken, there were two positive things to emerge from it with respect to the homeless. In Australia homeless people were housed in hotels and motels to prevent the spread of Covid. Having stable housing, sanitation and a reasonable income meant that many were rehabilitated into society and some were even able to get jobs, despite widespread job losses generally. In the process, state governments learned that it was far cheaper to house the homeless than to spend money on interventions such as police callouts, health and emergency services and court appearances. A University of Queensland study found the state spent an average of $13,000 a year per person or $15 million over its 1000 homeless clients. The state of Victoria is now taking up leases on 1100 rental properties in order to house people permanently. See the next post for more detail.
The high cost of doing nothing
Other countries have also observed the cost of doing nothing. In the UK for example, a 2015 report estimated that one rough sleeper costs the UK government approximately £20,128 ($US 27613) per annum whereas successful intervention costs only around £1,416 ($US 1956) per person. In the US with its high medical costs, the cost of treating a single homeless person amounted to around $1 million per year, far more than it would have cost to house the person and provide them with health care.
The toll on the homeless themselves is obviously worse, leaving them open to violence, discrimination, exploitation, hunger and other adverse consequences such as inability to access healthcare and education. A 2019 report from France found that 612 homeless people had died in the streets, either from exposure, from existing health conditions or due to suicide, a 19% increase on 2018 -2017. While the average age at death for males was 48.7, the age for women was 46 because they were more likely to become victims of violence. Although 90% of the dead were men, some were mothers with children and thirteen of the deceased were under the age of 18. Both the UK and Denmark have noted similar falls in life expectancy among the homeless. Dozens of homeless people froze to death in Europe in 2018 as did many in the UK and the the USA. In the US an estimated 688 of 5800 deaths among the homeless in 2018 were the result of hypothermia.
What’s being done?
This year the EU, fearing a further spike in homelessness as a result of the pandemic, has urged member states to make tackling homelessness and urgent priority. As well as working on affordable and inclusive housing, it is calling for equal access to healthcare, education and social services and integration into the labour market. It wants members to follow the “Housing First” principle pioneered by Finland over the last thirty years. That is, housing must be unconditional and not require the homeless to be drug and alcohol free first. Finland which now has almost no -one on its streets, found that it was far easier to help people to overcome their addictions if they had a stable home. It also did away with shelters and built purpose built permanent accommodation as well as providing work and learning opportunities.
Many cities since have followed Finland’s lead, for example in the USA, Salt Lake City in Utah, and Columbus Ohio, have managed to reduce homelessness by 91% and 70% respectively between 2005 and 2015. Similar programs are also being trialled in parts of the UK.
How "Housing First" works
Since this video was made in 2016, Salt Lake City has unfortunately been inundated with large numbers of homeless people from surrounding states creating problems for local residents and authorities alike and proving that homelessness needs to be addressed at national scale to be effective. Fortunately, President Biden has just announced a package of new housing policies for communities to build affordable housing rather than shelters (to prevent crime, the spread of disease and drug use) or to purchase existing accommodation, to accommodate the approximately 580,000 people who are homeless. There are also plans to increase rent subsidies and one time grants to first home buyers
Curbing investor enthusiasm
New Zealand has bravely taken on the speculators. It is calling for an end to negative gearing – i.e. the tax offsets given to investors rather than those buying a home to live in. It has also increased the time a property must be held to avoid a capital gains tax from five years to ten.
In Berlin, where 85% of the population rents and rents have gone up 44% in the last five years, the state housing authority has launched an online rent calculator to force landlords to reduce rents if they are more than 20% above similar dwellings in an area. Berlin also sold off its public housing and became a haven for speculators sparking rent strikes, street protests and housing occupations. While it is feared that that the rent cap might discourage investors (according to the real estate industry), 70% of Berliners are in favour. Ireland is also contemplating rent freezes and plans to build 400,000 homes. I presume they mean affordable homes because it already has an oversupply of investment property.
In 2014 Europe was found to have 11 million unoccupied homes,” enough to house the continent’s homeless twice over.” Spain had 3.4 million empty homes, France had 2 million, Germany 1.8 million, Greece 30,000, Portugal 735,000 and the UK an estimated 7000,000. Many were built during the credit boom which ended with the GFC. Ireland was left with 1300 unfinished dwellings and has already razed around 40 new housing estates. Deutsche Bank estimated that it would take 43 years to fill the oversupply.
The pandemic -inspired downturn in tourism has also led many European cities to consider appropriating empty short term rentals to accommodate their homeless populations, especially in Lisbon and Barcelona. Spain has also threatened to fine banks 1000 Euro if repossessed homes remain empty for more than two years.
Taxing vacant property
Paris apparently has long had a tax on vacant property – 12.5% on properties empty for more than twelve months and rising to 25% after two years. An interesting story in that regard comes from Canada which had a homeless population of 235, 000 in 2016 after ending its social housing program in 1993.
Vancouver, which found itself with 25,445 empty dwellings in 2016, implemented an empty homes tax of 1% on the asessed value of the home if empty for more than a certain period of time. Anecdotal evidence has it that you now see the strange sight of well –dressed landlords begging, even offering money to the homeless to please, please stay in their property for a time so that they are not liable for the tax.
In 2018 Canada also announced that it was spending $40 million on affordable housing. A good chunk will go on rent subsidies to 30,000 households and to enable some 385,000 people to keep their affordable homes. It also plans to provide more help to women, especially those fleeing domestic violence.
With Tasmania is about to have a state election, both major parties and the Greens have pledged to do something to improve housing affordability. As well as promising to build more houses and granting concessions for local people trying to buy homes, the Greens are considering rent caps and improvements to tenancy laws, and both Liberal and Labor are planning a surcharge on foreign buyers. Our main competition for housing however, seems to be from mainland residents fleeing higher house prices there or selling more expensive homes in order to retire here.
In other more encouraging news the UK is presently reviewing its 1824 Vagrancy ACT, hoping to do away with it
Scotland did in 1982, so that being homeless is no longer a crime. Since the wheels of government turn slowly many places and
organisations are also working to make life on the streets safer and better for
the homeless. This will be the subject of my final post on this topic along with a a few concluding comments. However, in between I will add a post from the Conversation about what happened in the state of Victoria. The last paragraph is particularly telling.