May 28, 2018
Real estate developers have been lining up to build permanent housing for the homeless in Los Angeles. But they are not doing this out of “charity.” No, they are looking to get their hands on the tax money that’s supposed to help the homeless.
Los Angeles gives enormous subsidies and valuable land to developers of construction projects supposedly aimed at homelessness. The developers then treat the land and subsidies as “seed money,” which they use to get special tax credits from the federal government. The developers then sell these tax credits to banks, in return for a share of ownership in the buildings.
On top of all that, the state of California often provides “cap and trade” money ... in the name of “energy conservation.” And once the project is completed, the federal government pays the rent of the homeless people through programs like Section Eight.
Not surprisingly, not much housing is actually going to get built. In fact, less than two weeks after city officials had announced that about 10,000 units would be built over the next decade, they were already reducing those estimates down to 6,000 ... supposedly because of increased “costs.”
Six thousand is a drop in the bucket compared to the dire homelessness crisis. Official estimates are that 58,000 people are homeless in Los Angeles County at any one time. And it’s growing every year.
The real estate developers and banks, that are sucking out the money that’s supposed to help the homeless, are the same ones that helped create the homeless crisis in the first place, through gentrification and the destruction of affordable housing. They are now making even more money from the misery that they created.