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A Growth Model Dependent On Stimulus And Debt Was Always Going To Be Unsustainable, And Now It Has Run Out Of Steam

A report from Banker and Tradesman. “Last year may have started off with a bang for many Massachusetts loan originators, but the sprint rapidly slowed to a jog, and then a slog. ‘I specifically remember the turning point was very weird,’ said Keith Hapenney, another top LO and loan originator at Leader Bank. A popular loan product dubbed ‘Lock, Shop and Drop,’ designed to let a prospective homebuyer lock a rate before starting to shop for a home turned into a loss-maker as the Federal Funds Rate rose by leaps and bounds. ‘What was meant to be a product that brought people in ended up us getting our asses handed to us on the portfolio side,’ Hapenney said.”

The Jax Daily Record. “The price of a single-family home in Northeast Florida rose 2.8% in April to a median price of $370,000, according to the Northeast Florida Association of Realtors. Median home prices in the region have fallen 7.65% since peaking in July at $399,450. Home prices are 2.4% lower than in April 2022. NEFAR’s April report said the number of closings, pending sales and new listings all dropped. NEFAR tracks home sales in Baker, Clay, Duval, Nassau, Putnam and St. Johns counties. While prices have slipped amid higher mortgage rates, the number of homes on the market is up 121% from a year ago, to 4,667 homes.”

The Star Telegram. “Some experts say they don’t see North Texas home prices going down as long as the area continues to see more people moving here population and a strong job market. The median home price in Fort Worth in April was $336,250, which was about 5.3% lower than a year go. The median listing price of a Dallas-Fort Worth home at the beginning of the COVID-19 pandemic was around $330,000, said Mark Roberts, director of research at real estate investment firm Crow Holdings. Compare that to median listing prices today, and North Texas homes are about $460,000. ‘You take the combination of that higher home price and higher mortgage rates, and that monthly mortgage payment has gone from about $1,100 per month to $2,400 per month,’ Roberts said.”

The Nevada Appeal. “The median sales price for an existing single-family residence in Washoe County was $540,000, an increase of 2.3 percent from the previous month and down 9 percent from last year. The median sales price of an existing condominium/townhome in Washoe County in April 2023 was $315,000, a decrease of 6 percent from last year. Lyon County had 74 sales of existing single-family homes, a decrease of 23.7 percent from the previous month and a decrease of 33.3 percent from last year.The median sales price for an existing single-family residence was $380,000, an increase of 1.6 percent from the previous month and a decrease of 33.3 percent from last year. Douglas County had 66 sales of existing single-family homes, an increase of 88.6 percent from the previous month and a decrease of 6.5 percent from last year. The median sales price for an existing single-family residence was $520,000, an increase of 4.5 percent from the previous month and a decrease of 18.4 percent from last year.”

NBC Bay Area in California. “Rakesh Rajappa bought a three bedroom, three bath San Jose home in 2020. He told NBC Bay Area he sometimes has buyer’s remorse, even at the lower interest rate. ‘I do have second thoughts. Was it cheaper just to rent?’ said Rajappa. ‘Or is it worth buying a house?’ Rajappa added he can’t imagine how new home buyers are doing it. The floor plan he bought two years ago for less than a million dollars is now selling for 1.1 million with interest rates at double what he pays. Kevin Mahoney and his partner said it’s difficult enough just paying rent, even with two incomes. They’ve pretty much given up on buying a home. ‘We’ve been looking to move out of the state, frankly,’ said Mahoney. ‘Because we just can’t afford to live here.'”

The Denver Post. “The heyday of marijuana sales in Colorado – back in 2020 when recreational and medical sales topped out at a combined $226 million – is a distant memory, as the state’s dispensaries struggle through an economic downturn, with sales plummeting and small businesses foundering. Nationwide, the marijuana industry’s share of real estate acquisitions is taking a hit. Realtors ‘are seeing a decline in commercial property purchases by marijuana industry-related businesses and a corresponding increase in leasing activity,’ the National Association of Realtors reported.”

“‘The market’s just bad. It’s bad right now,’ said 29-year-old Val Tonazzi, who works in cannabis sales. ‘There’s businesses closing, left and right.’ Business owners of smaller chains, like Renée Grossman, find themselves especially at risk. ‘There’s too many stores, there’s too much cultivation, there’s too many products,’ she said in a phone interview. Grossman was forced to move forward with a significant round of layoffs last year. She said other businesses in ‘cash crunches’ can’t pay their bills. ‘Most companies I know are losing money, or they’ve shut down and scaled back,’ she said. ‘A lot of companies that are my size or smaller are really feeling the burn.'”

CTV News in Canada. “A pair of real estate brokers have had their contracts terminated by RE/MAX and are also under investigation by their professional order. The realtors are Christine Girouard and Jonathan Dauphinais-Fortin. A La Presse investigation revealed they allegedly had friends and family members submit bogus offers on homes they were selling to create a sense of competition among legitimate buyers to drive up prices.”

“Girouard is one of the stars of the reality TV show ‘Numero 1.’ She and Dauphinais-Fortin are now facing an investigation by the real estate governing board of Quebec (OACIQ). On Wednesday, RE/MAX Quebec announced it was cutting ties with the two agents. Terry Kilakos, founder of North East Real Estate, says the way the bidding process works encourages buyers to overpay. Offers are kept confidential, leaving prospective buyers having to guess how much they need to bid to secure a home.”

“‘There needs to be transparency in the offers that are coming in,’ he said. ‘So basically, if you’re bidding on a house that’s selling for $500K and you’re going in for $490K, and you have somebody coming in and telling you, you need to bonify this offer because we have competing offers, you need to know what those offers are.’ According to La Presse, in at least one instance, Girouard and Dauphinais-Fortin had a friend submit a lowball offer to scare a prospective buyer into unnecessarily upping his bid by $40K.”

Daily Mail Australia. “Sydneysiders have lashed out after the city was voted the best in the world in a global survey. The poll, which surveyed 15,000 people in 20 different countries last month, rated Sydney as the top city in the world to live and fifth ‘best city brand’ overall behind London, New York, Paris and LA. Another user suggested the poll had ‘surveyed 15000 real estate agents’, in a jokey reference to Sydney’s savage rental market.”

“While the city may be attractive for boomers and older people with wealth, many younger Sydneysiders said they felt it was too expensive. ‘Sydney is the worst place to live,’ one wrote. ‘Over populated, worst rental crisis in history, nothing to do at night and if you do you have to fork our your own kidney. Let’s be real! There are nicer cities in the world.’ Another said it was the best city in the world if you turned a blind eye to the ‘train system, airport, nightlife, traffic, toll roads, house prices, wages, red tap and cleanliness.'”

“Another frustrated user added: ‘How does it keep receiving this title when it’s a ghost town that goes to bed at 10pm?!’  Lynnette Belivanis said she was ‘born and bred’ in Sydney but vehemently disagreed with the poll, questioning what it was based on. ‘Definitely not on the cost of housing,’ she wrote. ‘You have to be earning a three-digit salary to afford a mortgage that you’ll be paying off the rest of your life, and it’s only getting worse (my poor kids). The transport system sucks. The night-life has no life. Restaurants close at 10… if not earlier. Bars are not far behind. The cost of living in general keeps increasing with wages slow to catch up.'”

The Financial Times. “Something is rotten in the Chinese economy, but don’t expect Wall Street analysts to tell you about it. There has never been a bigger disconnect, in my experience, between some of the rosier investment bank views on China and the dim reality on the ground. Hopes for a reopening boom were based on the premise that, once released from lockdown, Chinese consumers would go on a spending spree, but company reports show no sign of one. Corporate revenue is now growing slower than officially stated GDP in 20 of China’s 28 sectors, including consumer favourites from autos to home appliances. Weak revenue is in turn depressing earnings for consumer goods companies, which normally track GDP growth quite closely, but shrank in the first quarter.”

“Many Chinese youth need a job before they can join a spending spree: urban youth unemployment is rising, and last month topped 20 per cent. These facts point to the source of the rot. Since 2008, China’s economic model has been based on government stimulus and rising debt, much of it pouring into the property markets, which became the main driver of growth. With debts so high, the government was much more restrained in its stimulus spending during the pandemic.”

“A growth model dependent on stimulus and debt was always going to be unsustainable, and now it has run out of steam. Much of the stimulus over the past decade had flowed through local governments in China, which used their own ‘financing vehicles’ to borrow and buy real estate, propping up the property markets. Those vehicles are fast running out of cash to finance their debts, which is curbing their investment in the property market and industry as well. Industrial sectors are slowing faster than the consumer-related businesses at the centre of the reopening story.”

“While analysts may have little to lose from rosy forecasts, the rest of us do. ‘Boomy’ chatter has contributed to investors’ loss of hundreds of billions of dollars in China in just the past four months. Further, global growth may prove weaker than expected in 2023, since the hope is that a US downturn will be countered by the China reopening boom, which may never come. It is time to expose this charade before the fallout gets worse.”

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This Post Has 61 Comments

  1. ‘existing single-family residence in Washoe County was $540,000, an increase of 2.3 percent from the previous month and down 9 percent from last year. The median sales price of an existing condominium/townhome in Washoe County in April 2023 was $315,000, a decrease of 6 percent from last year. Lyon County had 74 sales of existing single-family homes, a decrease of 23.7 percent from the previous month and a decrease of 33.3 percent from last year.The median sales price for an existing single-family residence was $380,000, an increase of 1.6 percent from the previous month and a decrease of 33.3 percent from last year. Douglas County had 66 sales of existing single-family homes, an increase of 88.6 percent from the previous month and a decrease of 6.5 percent from last year. The median sales price for an existing single-family residence was $520,000, an increase of 4.5 percent from the previous month and a decrease of 18.4 percent from last year’

    Like the BFE Florida sh$tholes above, these prices are bat sh$t crazy and this is where Jerry really screwed up. Or where he set us up. There is zero justification for prices half of these peaks.

    1. I have been to Lyon County, NV. That’s Fernley, Yerington, etc. The prices are so absurd that it is laughable. It’s a desert wasteland of sagebrush as far as the eye can see, and more land than you could ever possibly build houses on. You used to be able buy a house for $50,000. There are no words to describe house ridiculous a median price of $380,000 is in that area. I am staggered.

      1. I did a little Googlemapping, and, yeah. It seems that all of Nevada outside of the major cities looks like a trailer park scattered by a tornado. Where do these people work, if at all? I guess in the mining industry or at casinos along the road.

        1. This is “drive until you qualify” on steroids. It’s shocking. Yerington is a place where it is extremely difficult to sell a house even in good times. In bad times, there are no buyers unless the house is prices so low that it finally finds a new owner.

          This bubble makes the 2006 peak look sane by comparison. I really cannot express how ridiculously overvalued these places are. A 75% drop could still leave houses overpriced in some areas, based upon wages and current interest rates.

  2. ‘The median listing price of a Dallas-Fort Worth home at the beginning of the COVID-19 pandemic was around $330,000, said Mark Roberts, director of research at real estate investment firm Crow Holdings. Compare that to median listing prices today, and North Texas homes are about $460,000’

    A minor respiratory illness will do that.

    ‘You take the combination of that higher home price and higher mortgage rates, and that monthly mortgage payment has gone from about $1,100 per month to $2,400 per month’

    That’s quite the pickle Mark.

      1. Funny song! As a total motorcycle nut, sport,adv,moto-trials and hard enduro….I approve this song. Lol

    2. “A minor respiratory illness”

      The whole purpose of CCP Flu was the destruction of the middle class and working class. They did it all on purpose, and didn’t even try to hide it from you.

      The alleged “disease” itself was merely incidental to the greatest wealth confiscation scheme of my lifetime.

      1. The Fed created $4 trillion out of thin air, while the oligarchy increased its net worth by the same amount during the scamdemic. Even the dullest of the sheeple should see by now that this was never about public health.

  4. “The heyday of marijuana sales in Colorado – back in 2020 when recreational and medical sales topped out at a combined $226 million – is a distant memory, as the state’s dispensaries struggle through an economic downturn, with sales plummeting and small businesses foundering.

    As predicted, the potheads are buying from illicit dealers for the Mexican drug cartels rather than ponying up the 35% tax the dispensaries are charging.

    2. the 35% tax the dispensaries are government is charging.

      The Weed Tax is exempt from TABOR restrictions

    3. As predicted, the potheads are buying from illicit dealers for the Mexican drug cartels rather than ponying up the 35% tax the dispensaries are charging.

      Lots of folks just grow their own. It’s cheap and easy, all you need is a closet a couple hundred bucks to get started. After that, marginal costs are significantly less than legal and illegal markets.

    4. Not me….I find it much less expensive to buy from dispensaries than from trusted reliable local sources. I don’t advocate….but I’m 57 and smoked a little on a regular basis since teen days. Never been in trouble….did take a break in the military because I had a high intensity,high profile job….but I don’t think it’s as bad as booze.

  5. Business owners of smaller chains, like Renée Grossman, find themselves especially at risk. ‘There’s too many stores, there’s too much cultivation, there’s too many products,’ she said in a phone interview.

    Oh dear…dispensary owners & growers in Colorado Springs were using shacks as piggy banks because the banking system didn’t recognize pot revenues as legit…I fear any downturn in the legal pot biz will end up slamming local shack prices. This would be a Shakespearian tragedy.

  6. Justice Gorsuch Blasts Covid-Era Censorship and Surveillance (5/21/2023):

    “As Gorsuch dissected the legal complexities surrounding Title 42, he turned his scrutiny to the nation’s pandemic response, arguing that the lawsuit encapsulated the chaotic upheaval witnessed over the last three years in terms of law-making and civil liberties.

    The Justice did not shy away from suggesting that America may have suffered the one of the most significant civil liberties violations in the nation’s recent history.

    “Make no mistake—decisive executive action is sometimes necessary and appropriate. But if emergency decrees promise to solve some problems, they threaten to generate others. And rule by indefinite emergency edict risks leaving all of us with a shell of a democracy and civil liberties just as hollow,” he wrote.

    At the federal level, Gorsuch pointed out not just immigration orders, but also vaccine mandates, landlord-tenant regulations, and the pressure exerted on social media platforms to clamp down on “misinformation.”

    https://reclaimthenet.org/gorsuch-blasts-covid-era-censorship-and-surveillance

        1. It musically sounds awful and the lyrics are depressing. Prime example for the Morrissey school of optimism (/s).

      2. If by babes you mean twinks then yes. He doesn’t like babes. That’s an open secret in LA. But still one of the most amazing singers of all time. He’s much bigger in America today. The English consider him washed up but he’s as popular as ever here.

        1. amazing singers

          George Michael, Seal and Brendon Urie (Panic! At the Disco)

  8. A reader sent these in:

    This housing bubble will be bad 🚨 TikTok real estate gurus are still 🔥🔥🔥 How much real estate do you think this guy owned back during 2007-2008? He has never been thru a bad real estate market.

    https://twitter.com/WallStreetSilv/status/1660056983825797123

    Last Walmart in North Portland Closing Down … they cannot overcome the losses from shoplifting. The people of Portland voted for this so retail stores are exiting. 🤡 🌎

    https://twitter.com/WallStreetSilv/status/1659651899690197009

    Talking to an Airbnb owner in Galveston of 2 condos – bookings have fallen off significantly from 90+ day bookings for week+ trips versus people booking 15-30 days out now & 2-3 night trips. They’re trying to sell both now.

    https://twitter.com/DonMiami3/status/1660138248998473730

    1. “Last Walmart in North Portland Closing Down … they cannot overcome the losses from shoplifting.”

      I was at WalMart on Friday evening. The self-checkout line had FOUR employees diligently watching 8-10 checkout stations. There were also THREE Wal-mart “greeters” at the exit demanding a receipt. They must have massive shoplifting issues. Meanwhile, the semi-rural Wal-Marts are wide open.

      Last month, Giant — our local grocery store chain — limited the self-checkout line to 20 items. At first I thought they just wanted more express checkouts, but the accompanying sign said that the increase in theft and crime had forced their hand, and they wanted to “increase the safety of all” etc etc. Then a couple of stores converted one of their sets of doors to Emergency Exit only.

      Yup, blue state. I’m guessing that the low-level thugs (immigrant variety) are pushing their luck, thinking, hey, it works in California, let’s try it here.

      1. Meanwhile, the semi-rural Wal-Marts are wide open.

        They don’t check receipts at the exit in my little burg … yet.

      2. You might be surprised at who does all the stealing. There is an entire spectrum of shoplifters and many of them even have pockets full of money. If you get bored there is a great YT channel called ‘gas station encounters’ where they do a play by play as the shoplifter enters the store and steals something, then they confront them.

          1. “Surprise me. Who is doing all the stealing?”
            black people

            “And why not at the semi-rural Walmarts?”
            only white people live there

          2. Most of the shoppers in that particular Wal-Mart are either Hipsanic, or South Asian/some southeast Asian. IIUC, these cultures are used to haggling and personal favors, and probably don’t agree with the take-it-or-leave-it pricing at American companies.

          4. I’m being euphemistic. The mentality seems to be that stealing is ok if you’re stealing from whites. Even though the Wal-mart employees are diverse as they come (they look just like the customers), that doesn’t seem to be a deterrent. More likely the employees are seen as traitors, etc.

          5. Don’t kid yourself, there is no shortage of white thieves. In urban areas they are often the largest group that is stealing. WalMart didn’t close all of their stores in Portland OR because of a diversity problem. On ‘gas station encounters’ what you will find is that everyone is doing it. Young women, old women, hipster guy, on and on with pretty much every character type represented. It is interesting because it is just some random gas station in middle America with a big Youtube play button on the wall with visible cameras covering every inch of the store and still the crime wave never stops.

      3. I was at my local Sam’s Club and a cop was literally chasing a lady around the cars telling her she was under arrest. Then about 15 more cop cars showed up. Imagine living in a state where laws are still enforced.

        1. A friend’s gardener is being deported by ICE. She’s bummed. I told her that he’s probably not dependent enough on the government and he should try crossing over again under a different name using the app provided by DHS.

  9. The Financial Times. “Something is rotten in the Chinese economy, but don’t expect Wall Street analysts to tell you about it. There has never been a bigger disconnect, in my experience, between some of the rosier investment bank views on China and the dim reality on the ground.“

    “These facts point to the source of the rot. Since 2008, China’s economic model has been based on government stimulus and rising debt, much of it pouring into the property markets, which became the main driver of growth. With debts so high, the government was much more restrained in its stimulus spending during the pandemic.”

    “A growth model dependent on stimulus and debt was always going to be unsustainable, and now it has run out of steam.“

    ***

    – This article is about China, but it could be any G7 or OECD country; they all have a central bank, which in turn have fiat currency, printing press, and major property asset bubbles in various stages of bursting. The central banks are the vector of the financial pandemic and a pox upon the world.

    ***

    https://markets.businessinsider.com/news/stocks/analyst-labels-ai-as-infant-bubble-warns-federal-action-could-burst-it-3-investor-lessons-from-dot-com-collapse-1032339907?op=1

    Analyst Labels AI As ‘Infant Bubble,’ Warns Federal Action Could Burst It: 3 Investor Lessons From Dot-Com Collapse
    Benzinga
    May. 19, 2023, 09:40 AM

    “The analyst said that the first phase of the AI-stocks’ surge can be compared to other market bubbles in recent decades, such as Cathie Wood’s ARKK Innovation ETF (NYSE:ARKK) after 2019, FAANGs after 2016, dot-com stocks in the 2000s and Asian stocks in the 1990s.”

    “Bubbles in right things, such as internet, and wrong things, such as housing, always started by easy money, always ended by rate hikes,” Hartnett said.

    Lesson 1: Cheap Money Created Internet Bubble

    “The Fed responded to the Asian and Russian financial crises of the 1990s by lowering interest rates, despite the fact that the economy did not require it. This merely fueled the Internet dot-com bubble, with the Nasdaq jumping from 2000 to 5000 between October 1998 and March 2000. “We don’t advise chasing the bubble in 2023,” Hartnett said, noting that more than 200 basis points of Fed rate cuts are already priced in until the 2024 elections.”

    – Asset bubbles and inflation. What’s not to like?

    1. Analyst Labels AI As ‘Infant Bubble,’

      Some people will invoke the “Turing Test” to prove that AI’s are sentient. Alan Turing posited that if a computer can engage with you in a conversation and you can’t tell it’s a computer, them it is sentient.

      So, does that mean that if I can create a flight simulator that is so realistic that you think you are flying, does that mean your are flying? Think Star Trek holodeck.

      1. if a computer can engage with you in a conversation and you can’t tell it’s a computer, them it is sentient.

        That assumes all humans have equal intelligence. We know that isn’t true.

        1. That assumes all humans have equal intelligence. We know that isn’t true.

          Yeah, I’ve spoken to plenty of people that I know can’t pass for what I consider to be of normal intelligence. Quite a low bar with some dunces I’ve had the pleasure of meeting.

          1. But…but…but! We are all supposed to be equal. And if we do not agree, the government will hit you and punish you in all sorts of fashion to show you the error in your thinking.

          2. equal

            They want equity not equality. Equality is equal opportunity. Equity is equal outcome, a communist ideal.

      2. and you can’t tell it’s a computer, them it is sentient.

        That is BS. The computer has to lie to you to even do this exercise. So, if you can’t tell it is lying it is Truthful?

        1. I fully agree. But in some circles the Turing Test is accepted as gospel, hence the rise of the chatbots.

  10. Last Walmart in North Portland Closing Down … they cannot overcome the losses from shoplifting. The people of Portland voted for this so retail stores are exiting. 🤡 🌎

    “The social system of private property and limited government is the only system that tends to debarbarize all those who have the innate capacity to acquire personal culture.” – Ludwig von Mises

    “A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society.” – Ludwig von Mises

    “The goal of socialism is communism.” – Vladimir Lenin

    1. The goal of socialism is communism

      There is no “socialism”. It’s communism in disguise.

  11. MarketWatch
    Home
    Personal Finance
    Real Estate
    Home buyers will now be able to put down as little as 1% on their home, Rocket Mortgage says
    Last Updated: May 22, 2023 at 11:56 a.m. ET
    First Published: May 22, 2023 at 9:00 a.m. ET
    By Aarthi Swaminathan
    Rocket Mortgage is offering a new program that allows low- to moderate-income home buyers to put down as little as 1% on their dream home

    Home buyers will be able to put as little as 1% down as payment for a home under a new program launched by Rocket Mortgage RKT .

    A new product by one of the biggest non-bank mortgage lenders in the U.S., called ONE+, will allow low and moderate-income aspiring homeowners to buy homes in their area with just 1% of a home’s purchase price down, the company said, as well as avoid paying mortgage insurance, both of which reduces the overall cost of owning a home.

    To ensure the mortgages that originated by Rocket are sold and guaranteed by Fannie Mae FNMA and Freddie Mac FMCC , government agencies that buy home loans and supply funds to banks and mortgage lenders and support the housing sector, Rocket will pay 2% of the borrower’s loans, the company said. Their mortgage premium, which is typically required if a home buyer puts down less than 20% on a home, will also be slashed.
    …

    2. What could possibly go wrong?

      Question for the day: What percentage of these loans will *not* be fraudulent?

    4. The sign of a top. Is there a way to get their loan list? These will have the highest foreclosure rates soon and the biggest discounts in few years. Rocket probably expects to go bankrupt soon so they don’t care.

      1. Spot on! I was in the mortgage biz last cycle and your are absolutely correct. The bat sh#t crazy stuff came out right at the end. Complete desperation move to try and resuscitate.

    1. Yahoo
      Bloomberg
      PacWest to Sell $2.6 Billion Real Estate Loans at Discount
      Sam Nagarajan and Daniel Taub
      Mon, May 22, 2023 at 9:17 AM EDT·2 min read
      In this article:

      (Bloomberg) — PacWest Bancorp, one of the US lenders engulfed in the regional banking turmoil, agreed to sell a $2.6 billion portfolio of real estate construction loans amid efforts to shore up liquidity.

      Kennedy-Wilson Holdings Inc. will purchase the group of 74 loans at discounted price of about $2.4 billion, it said in a statement Monday. The buyer will also assume all future funding obligations under the loans of about $2.7 billion, it said.

      PacWest has taken steps to bolster its finances after runs on deposits struck several regional lenders, ultimately leading to the collapse of three California-based banks and one in New York. PacWest has been weighing strategic options, Bloomberg News reported earlier this month, and already lined up $1.4 billion from a financing facility provided by Atlas SP Partners as it leaned on various federal programs for cash.

      The portfolio of loans PacWest is selling accounts for more than half of its real estate construction and land loans, its filings show. PacWest will sell six more loans to Kennedy-Wilson for about $363 million if it wins certain approvals, the Beverly Hills-based lender said in a separate statement.

      Shares of the bank were up 12.5% in early in New York trading.
      …
      https://finance.yahoo.com/news/pacwest-sell-2-6-billion-110805902.html

  14. Stephen Eide
    The Encampment State
    Billions in spending have failed to solve California’s massive—and worsening—homelessness crisis.
    / From the Magazine / The Social Order
    Special Issue 2023: Can California Be Golden Again?

    Ask the average Californian his take on homelessness, and he’ll say that it’s gotten much worse. Back in the early 2000s, a visitor to Los Angeles’s Skid Row or San Francisco’s Tenderloin would have witnessed scenes of misery that seemed scarcely capable of further deterioration. Intense reaction against street conditions back then gave rise, in many California cities, to campaigns to end homelessness, prompting billions in new spending. But no California city ended homelessness; the average Californian’s impression is correct. According to the best data available, homelessness in California grew during the 2010s and is still growing.

    It has also spread. Governments once aspired to contain homelessness-related disorder within the boundaries of forlorn neighborhoods like Skid Row and the Tenderloin. But containment strategies are now just as discredited as the goal of ending homelessness. Tents are everywhere: the suburbs, the beaches, riverbeds, beneath overpasses, urban parks, median strips, nature preserves, and sidewalks surrounding City Halls. The crisis’s dispersion has caused regional tensions, with neighboring communities trading accusations of dumping their homelessness problems on one another. To sort out inter-municipal disputes, and those between city and county governments, state government has had to step in. Since taking office in 2019, Governor Gavin Newsom has often identified homelessness as his top priority—another measure of the issue’s magnitude. Most states view homelessness as a local problem.
    …
    https://www.city-journal.org/article/the-encampment-state

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