Noah Berger/AP Photo
A socially distanced homeless encampment at San Francisco’s Civic Center, from May 2020
This article appears in the April 2022 issue of The American Prospect magazine. Subscribe here.
San Fransicko: Why Progressives Ruin Cities
By Michael Shellenberger
Harper
Americans love people who find redemption by acknowledging their sins, see the light, and change their lives. Michael Shellenberger claims to have once been a progressive, but that the failure of so-called progressive cities (particularly San Francisco) to solve the crisis of homelessness turned him into a conservative. Now he’s become an evangelist for conservatism. San Fransicko is his confession.
Despite its many endnotes, this is not a scholarly book. The author distorts and misuses facts when it suits his arguments. San Fransicko is a tirade against permissiveness—cities that allow homeless people to live and sleep on sidewalks, in parks and tent encampments in residential neighborhoods and business districts, polluting those spaces with drug needles, urine, feces, empty bottles of alcohol, and unkempt people unmoored from reality.
Shellenberger argues that homelessness is not primarily the result of poverty and the shortage of affordable housing. It is, he claims, really a problem of mental illness and substance abuse. He blames what he calls “pathological altruism”—progressive municipal officials and do-gooders who refuse to enforce vagrancy laws that would bring order and civility to urban streets.
Shellenberger made a name for himself as a critic of the environmental movement for its opposition to nuclear power and fracking. In 2016, he started Environmental Progress, which launched campaigns to keep nuclear power plants in operation, testified in Congress in favor of nuclear energy, and worked with the Nuclear Energy Institute, an industry lobby group. In a TED Talk, Shellenberger argued that switching to renewable energy sources like solar power and wind is destroying the environment. In 2018, his unsuccessful campaign for California governor garnered only 31,692 votes. Three years later, he backed Kevin Faulconer, San Diego’s Republican former mayor, in his failed bid to unseat Gov. Gavin Newsom. Then on March 10, he announced that he’s running as an independent candidate against Newsom.
NO BIG CITY IN AMERICA—whether governed by conservatives, liberals, or progressives—has solved its housing crisis. According to the National Low Income Housing Coalition’s “Out of Reach” report, “In no state, metropolitan area, or county in the U.S. can a worker earning the federal or prevailing state or local minimum wage afford a modest two-bedroom rental home at fair market rent by working a standard 40-hour work week.”
Rents have been rising faster than incomes, especially at the bottom half of the labor market. According to a report by Harvard’s Joint Center for Housing Studies, in 2019 (the latest data available) more than 80 percent of renters earning less than $25,000 paid more than 30 percent of their incomes just to put a roof over their heads. Most paid more than half of their income for rent. Even 70 percent of renters earning between $25,000 and $34,999, and nearly 50 percent of renters earning between $35,000 and $49,999, paid more than 30 percent of household income for rent.
Before the COVID pandemic, more than a quarter of all unhoused Americans lived in California, which has 12 percent of the nation’s population. Almost three-quarters of the state’s homeless people—and 73 percent of San Francisco’s 8,124 homeless residents—are unsheltered, a higher share than in any other state.
California has the nation’s highest “housing wage”—the income needed to afford a typical apartment. The typical monthly rent for a two-bedroom apartment in California is $2,030, so a family needs to earn $39.03 per hour to avoid paying more than 30 percent of its income for rent. In San Francisco, that wage is $68.33.
Typical of Shellenberger’s disingenuousness, he writes that “Palo Alto and Beverly Hills have mild climates and expensive housing but don’t have San Francisco’s homeless problem.” But both are wealthy suburbs with few low-income residents who are likely to fall into homelessness.
Contrary to Shellenberger’s argument, a recent Harvard report found direct correlation between median rents and the size of the homeless population.
Source: “The State of the Nation’s Housing,” Harvard Joint Center for Housing Studies
The combination of low wages and rising rents leads many working people to wind up sleeping in their cars, on friends’ couches, on the streets, or in shelters. A recent survey I co-authored of over 10,000 grocery workers in Southern California, the Seattle area, and Colorado discovered that 14 percent had been homeless during the previous year; even 9 percent of full-time workers suffered that fate.
AMERICA’S HOMELESS CRISIS is not primarily a problem of personal pathology. The initial surge of homelessness in the 1980s resulted from the combination of closing the nation’s mental hospitals (without providing the promised funding for community-based treatment settings) and the Reagan administration’s cuts in federal funding for low-income housing. When more low-rent housing was available, including many rooming houses since lost to gentrification, even people on society’s margins could afford a roof over their heads.
Contrary to Shellenberger’s argument, San Francisco, like most California cities, has been run by business-friendly Democrats, not progressives. Since the late 1970s, San Francisco has only had one progressive mayor—Art Agnos, who served from 1988 to 1992.
Most cities have pursued a strategy of promoting construction of new office buildings and hotels, often via tax breaks, to encourage high-tech, finance, insurance, health care, and tourism businesses. The huge influx of highly paid employees, along with many low-wage workers, exacerbates the widening income divide. These cities also prioritize new luxury housing, hoping that the increase in supply will trickle down to help low-income renters find decent apartments.
But that approach never works. Instead, rents trickle up, as owners of existing properties raise rents closer to the levels of the newly built apartments. Landlords evict lower-income renters, many of whom wind up on the streets or in cramped and overcrowded quarters. A 2019 report found that 70 percent of San Francisco’s homeless people once had a home in the city.
The only way to create new housing that secretaries, garment workers, day care workers, janitors, nurses, schoolteachers, and hotel housekeepers can afford is to provide government subsidies to builders, homebuyers, and tenants. Cities don’t have that kind of money and Congress has not come close to restoring the federal HUD budget to pre-Reagan levels. Today, only one-quarter of households eligible for federal rental assistance receive it, due to funding limitations. Unlike food stamps, housing assistance—such as subsidized apartment buildings or housing vouchers—is not an entitlement. It is more like a lottery. In most cities, there are long waiting lists for housing aid—so long that many cities have stopped accepting applications. Most poor families are at the mercy of the private rental market.
Shellenberger refuses to acknowledge that mental illness and addiction are often caused or at least made worse by being homeless.
Shellenberger seems unaware of various state laws that preempt California cities’ ability to address their housing crises. He decries California’s “high taxes,” but doesn’t even mention Proposition 13, a 1978 ballot measure that dramatically limited local governments’ ability to raise property taxes on homeowners, landlords, and businesses, depriving municipalities of revenues they need for basic municipal services, let alone subsidies for affordable housing.
Nor does Shellenberger mention the Ellis Act, a 1985 state law, sponsored by the real estate industry, that allows landlords to evict tenants in order to remove housing units from the rental market. As California’s housing market has heated up, speculators have abused the law by purchasing and then demolishing older buildings in order to build newer, expensive market-rate projects. Under the law, San Francisco has lost 4,576 rent-controlled units, while Los Angeles, with almost five times as many residents, has lost 27,000. For years, housing activists have tried without success to get the state legislature to repeal the Ellis Act.
Even more glaring is Shellenberger’s failure to mention the 1995 Costa-Hawkins Act, another real estate industry–backed law, that prohibits cities from regulating rents when a unit becomes vacant. This creates a perverse incentive for landlords to evict tenants, often by illegal means, including harassment, so they can raise rents on new tenants. The result: a steadily declining number of apartments covered by rent regulation in Los Angeles, San Francisco, and other cities.
Progressives have successfully pushed some cities to adopt inclusionary zoning laws and linkage policies to require developers to help mitigate the cost of rising rents caused by market-rate development, but these are Band-Aids, not fundamental solutions. In contrast, a coalition of Los Angeles labor, housing, and social service activists recently launched a campaign to increase taxes on real estate transactions over $5 million. This would raise over $800 million a year to fund permanent affordable housing and to provide emergency relief for renters at risk of eviction. The measure will go into effect if more than half of voters approve it on the November ballot.
SHELLENBERGER CLAIMS THAT “homelessness exploded” in California around 2009 after the state stopped making housing assistance conditional on sobriety. But he ignores the reality that California, like the rest of the country, was then reeling from the biggest housing crash since the Depression—a catastrophe caused by banks’ reckless and illegal behavior. Many middle-class and low-income people lost their homes.
Echoing Reagan, Shellenberger argues that most homeless people are homeless by choice. He thinks the poor, homeless, or addicted should make better choices. And progressives should stop making excuses for them by blaming their plight on broader economic and social forces.
Shellenberger condemns “housing first” approaches that offer homeless people a secure roof over their heads, without requiring them to first get sober or get treatment for mental illness. He wants local police to arrest homeless people who use drugs, abuse alcohol, and beg on the streets. In fact, a growing number of cities have recently begun removing homeless people from encampments and other public spaces in response to complaints from business groups and local residents. When San Francisco Mayor London Breed announced a crackdown on street crime and drug dealing last December, Shellenberger claimed vindication. He even urges California to create a new agency, Cal-Psych, which would institutionalize people who live on the streets. To make his case, Shellenberger claims that European countries have moved away from progressive “harm reduction” approaches to utilizing arrests and mandatory treatment in dealing with homeless people, but he gets that wrong, too, as Maia Szalavitz and others have shown. Coerced treatment and criminalization don’t work, said Laura Thomas of the San Francisco AIDS Foundation. “We don’t have enough services, we don’t have enough housing, we don’t have enough shelter beds.”
Shellenberger ignores the evidence that people with addictions and mental illness are more likely to improve their situations when they have unconditional access to stable housing. For example, that approach has cut chronic homelessness among military veterans by about half. Of course, “housing first” is easier to adopt in cities without sky-high rents, such as Houston, where the approach has been successful.
For the 32 percent of unhoused Californians who are chronically homeless, and whose plight is exacerbated by disabilities, the solution is stable housing with wraparound support services, according to a just-released study by the California Budget & Policy Center. In recent years, Los Angeles has moved about 9,000 homeless people into hotel rooms, but the overall homeless numbers didn’t decline because an even larger number of people fell into homelessness after getting evicted. The same is true in San Francisco, where the head of the city’s Department of Homelessness and Supportive Housing pointed out that for every person who exits homelessness, three fall into it.
Shellenberger refuses to acknowledge that mental illness and addiction are often caused or at least made worse by being homeless. Losing your job, getting evicted, and winding up homeless and living on the streets, or moved from shelter to shelter, are traumatizing experiences.
Similarly, as one research team recently found, “the association between homelessness and drug use is bidirectional, and homelessness itself plays a role in drug use and overdose risk.” Consider West Virginia, which ranks first in drug overdose deaths and is ground zero in the opioid crisis. That state has one of the nation’s lowest rates of homelessness, mostly because housing is inexpensive (the typical monthly rent for a two-bedroom apartment was $771), and a housing wage of $14.83.
Religious zealots are not persuaded by facts and rational arguments. Shellenberger had a conversion experience and now he wants to convert liberals and progressives to atone for their sins. Shellenberger, meanwhile, has violated one of the most important commandments: “Thou shalt not lie.”
This article has been updated to reflect that Shellenberger has worked with the Nuclear Energy Institute but not directly as an employee.
