A Challenge to New York City’s Homeless Policy

A score of families gather daily in the courtyard of a city office in the Mott Haven section of the Bronx. The parents spend time chatting at the picnic tables while children play tag on a few patches of grass. The scene is gentle. But it poses a growing challenge to Mayor Michael R. Bloomberg’s strategy for reducing homelessness.Each of the families first came here to apply for a place in the city’s homeless shelters, a first step toward getting housing subsidies. They have all been evaluated and told they do not qualify because they have homes they can return to — most often the crowded apartments of relatives.That was supposed to be the end of the story. But these families have not taken no for an answer. Instead, after the office stops taking shelter applications at 5 p.m., they stay and ask the after-hours staff for emergency shelter, which the city says is for families in a one-time crisis only.

Then sometime between 7 p.m. and 2 a.m., they and their children take all their belongings — shopping carts and strollers laden with televisions, toothpaste, fans — to board buses for a city shelter. Sometimes they are taken to a shelter in the Bronx; sometimes they go to Brooklyn or Queens. It is different every night.

They unpack, shower and sleep until 6 a.m., when they are awakened by the shelter staff. At 7 they are bused back to the city office in the Bronx, where they wait in the courtyard until the office closes at 5 p.m. and their nightly routine begins again.

It is a brutal existence.

Until recently the number of families willing to undergo such hardship was small. Officials say that families were given emergency late-night shelter, and did not reapply during office hours the next day, fewer than 75 times a month for most of 2006.

But the number erupted over the summer. In July, such families checked in for emergency overnight stays nearly 800 times. City officials and advocates for the homeless estimated that a core group of families, perhaps dozens, stayed in this cycle for weeks or longer.

Interesting. Good thing I live in Manhattan with all the other middle-class-and-up urbanites, or I might have had to notice this personally.

This article isn’t too bad. It’s a bundle of anecdotes strung around a central argument which, on the one hand, says that New York families are trying to use the City as a source of preferred housing:

“Overwhelmingly these are young moms who don’t like being doubled up,” Mr. Hess said. “They are using staff and other resources that are slowing the whole system down, and it could have a very detrimental effect on families truly in need. We can’t allow that to happen.”

While, on the other hand, the argument is that New York families are not being assured adequate housing:

advocates for the homeless see it differently. They believe that the city’s evaluation process is still rife with errors. They point to the hundreds of families who have been found eligible for permanent shelter on second, third and fourth applications even in the last year.

The city says most of those cases involved changing family circumstances, but the advocates say the idea that a family would agree to such a crushing daily existence if they had options is ridiculous.

The Times, however deliberately (or not), does not clear this water in the least. They seem to lean in favour of the families, but their anecdotes include things like this one:

Still, Ms. Mabry says she cannot return to her mother, with whom she has never gotten along. She ran away at 17. Neither will she live with her mother-in-law, who has an apartment just blocks away from the office in the Bronx and is holding some of their personal belongings. “I am the head of my own household,” Ms. Mabry explained, “and she doesn’t understand that.”

Besides, Ms. Mabry says, that apartment is already full, housing her mother-in-law, her mother-in-law’s husband, the woman’s daughter, and the wife and two children of another of the woman’s sons.

The latter point should be enough (and would be, in much of the rest of the OECD) to qualify this girl (she’s 19), but the first point made does not win her much sympathy in what is an inherently normative debate. When one has their own house, then one is the head of their household. In this cruel world it is also rather much from someone in her circumstances to demand the City give her the resources over which she can take responsibility (I said it was a cruel world).

Is housing extra-welfarist?

So here are two types of welfarism. Ordinary old Neo-Classical welfare economics, whether it includes housing or not in the utility function for households, probably dictates that this situation does not change, for all that it sounds as though Bloomberg has brought it up to a higher standard. This is because of a principal known as Pareto efficiency. It’s a big one in Neo-Classical thinking.

In simple terms, it says you cannot make one party better-off while making another party worse-off. In this case, we cannot give these people housing because it will affect the system as a whole, making others worse-off. The fact that it is currently inequitable (assuming that it is) does not affect the (assumed) pareto efficiency. This is big among the criticisms of the concept.

I say it’s Pareto-efficient only based upon the quote used above. In fact it may not be, in which case Pareto improvements can be made, such that these families can be housed, and the system need not suffer. Anybody care to guess how that can be done? The Independent Budget Office of the City of New York might be able to help. So might a banner reading “Bring the Troops Home”. That’s right: more money overall.

Now, this extends more broadly. If that means more taxation, that too runs into the same welfarism problems. Maybe we just don’t want to pay taxes to house these people (which, in the US, is largely true: I refer to welfare states too lazily. The US has a ‘safety net’, perhaps more than a true welfare state). But that also assumes, in turn, that the City, State and Federal Budgets are being used efficiently. I’m not convinced, me. Bloomberg spent USD100m of his own money to stay in office – I’m guessing other shoes have quietly dropped all over the City’s budget. Actually the US, and many countries, typically operate with Kaldor-Hicks efficiency, if any (I consider it the “let’s not and say we did” of Paretian welfare economics, but opinions differ).

Extra-welfarism comes along when big-h Housing is not included in the utility function of households. So far we’ve assumed that Housing is something that can be traded in or out of a household, keeping their utility the same. Extra-welfarism would say that Housing, like, say, Health, is a merit good, which people should have regardless of their desire. It, like my attitude towards the 19 year-old girl above, is good old fashioned soft paternalism, except in extra-welfarism it is society’s soft paternalism: do we, as a society, with our social welfare function, think that families should have adequate housing?

If you ask people they’d say yes (they’d say junkies shouldn’t, but that’s a minor issue). In practice, this is difficult to see manifest. For a start, most conservatives (yes, yes, even the compassionate ones) would insist that Ms. Mabry has plenty of options and just wants – naturally – something that matches her wants, rather than her needs. I’m sure the phrase “get a job” would make several cameo appearances.

Therein lies the problem. By all appearances we have decided upon an extra-welfarist approach to health, housing, food and many aspects of household consumption (and production), labelling them merit goods and reacting appropriately with social policies. We just have different ideas about the level of Housing that families ‘should’ get. To some, Ms. Mabry’s being woefully under-housed. To others, she should go back to her mother, or go out to Kansas, find a small house and be a waitress – New York is no place for the poor (a quirk of statistics I mentioned the other day).

Getting back to the Neo-Classical argument. Since this ‘is’ the system, imposed by governments that we have elected, we can say that the Social Welfare Function Has Spoken. Or something. But our assumption that agents are (a) rational and (b) fully and symmetrically informed has not been met. The New York Times is, presumably, adding to our knowledge of the State of Social Welfare in New York City, allowing it to become a measure of government that we can use at the next election. Which I’m sure is what we’d all like to see. Cynics and Skeptics can join me over here, after the presentation.

There was something else I wanted to mention, but it’s slipped my mind, now.

Hard Paternalism

There’s a risk to what the New York Times is doing. Its language is using the children rather a lot, and this is where extra-welfarism gets tough; where soft paternalism becomes hard. If we, as a society, say that, not only are things like Housing (and, now, Education) merit goods, deserved by all, they are moreso by children. Particularly children being kept out of school for nonsense like this. The State has only one recourse: remember, a merit good is one that we all agree people get whether they desire it or not, and we invest the State with the authority to determine when a need for health, housing and education exceeds the need for one’s own mother.

Yes, extra-welfarism will also dictate taking these children away. Sadly, probably not far, thanks to the jealous hold states have on their own small powers. Which is why these children would probably not end up much better off, if they only stayed in State care somewhere on the margins of New York City.

This is, while I appear to be beating up on the US, not uncommon. Welfare has the same problem all over. People’s sense of entitlement are different in different social strata. What we see as welfare dependence is probably less than we would demand in the same position, but we are unsympathetic nevertheless (this is how Kaldor-Hicks bothers me: it is, in practical terms, fairly one-way, and easily abused).

I, personally, do still have problems with people staying in dense urban areas in these circumstances, and I think managing the movement of people out of low-opportunity areas into high-opportunity areas should be a priority for Cities (the same is true in Sydney). That is my crime of soft-paternalism: thinking I know where homeless people would be better off. But, after all, is moving out to where there is space, peace, housing and a job not the American dream?

Unfortunately that, too, runs up against the efficiency with which social services can be provided. I’m just not all that into the idea of ruthless efficiency in our social services. It seems against the grain. Ruthless efficiency in our fire department would mean some houses burn down – we don’t go in for that. We certainly don’t go in for it with the military, or your senator’s however-many-offices-and-staff. Why should poor people be the only ones we accuse of wasting public money?

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