Homelessness and the Failure of Urban Renewal | Mises Wire

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause—it is seen. The others unfold in succession—they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference—the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favorable, the ultimate consequences are fatal, and the converse.  ~Frederic Bastiat

The parallels are numerous, and highly revealing, between our attempts to control prices in healthcare over the past 50 years and that of government attempts to solve “urban blight” and improve inner city living conditions.  In his book Myth Busters: Why Healthcare Reform Always Goes Awry, Greg Scandlen does a fantastic job of laying out the case for the negative unintended consequences of central planning in healthcare. https://www.goodreads.com/book/show/34942619-myth-busters

homeless“…Since the Progressive Era, government agencies — from the federal level on down — have been front and center in subsidizing, regulating, and planning city development in ways that have made housing in city centers more sparse and more expensive for households who aren’t part of the hipster-millionaire demographic that so many urban planners and politicians are working hard to attract.

While rising demand for housing in a fixed number of square miles will indeed increase the price of land and housing, various types of government intervention makes housing more expensive than it would otherwise be. And sometimes, through zoning ordinances and other regulations, cities largely outlaw just the sorts of housing that are most needed by low-income residents…

City planners were happy to show off the shiny new projects they had used government money to redevelop. But unseen were the households who simply could not afford units in the new buildings.

After all, the poor that lived in the slums lived there precisely because it was cheap, low-rent housing. Reformers admitted there were no “pat answers” to explain what would become of the displaced families. But few reformers seemed much troubled by it. Then, as now, it may have been what really mattered to reformers was to be able to claim they were doing something.

It turned out that the federal government’s grand plan of leveling flophouses and residential hotels in the name of “beautifying” cities, mostly just resulted in destroying the only housing the very-low-income population could afford. Deprived of their units in the slums, these people ended up living in tent cities and cardboard boxes instead.

Today, little has changed for those with the lowest incomes. The options once available to them in the pre-1950s world are gone, and were never replaced.

Thanks to the persistence of the Progressive mindset in cities, zoning, “redevelopment” and a centralized control of new construction remains the norm. “Density” is the new “congestion” and the attitude of city planners remains the same. They bemoan the lack of affordable housing while also blocking efforts to build more housing. Meanwhile, they tighten controls on modern-day boarding houses and other private-sector attempts to provide low-cost housing…

…Tax Increment Financing (TIF) legislation is geared not toward low-cost housing, but toward new commercial development. Often, that development is built where “unsightly” (but affordable) housing once existed. Its destruction is encouraged by government policy…

Yet, city centers remain the most practical place for very-low-income housing to be built and sustained. This is because the lowest-income households need to be close to the densest areas that sustain mass transit and access to employment. By destroying the urban ecosystem of very-low-income housing, though, governments have left many of these people few options other than living in cars, alleyways, and sidewalks…

…We continue to live with the wreckage of failed urban renewal, and the evidence can be seen in the tent cities and makeshift latrines we now see in public spaces.”

Source: Homelessness and the Failure of Urban Renewal | Mises Wire