There is currently a huge problem
regarding homelessness, and it is a difficult one to solve. Being
homeless is not free. Well, perhaps the homeless person doesn’t pay
for housing, but the city they live in still has a lot of costs.
First, the city has to pay to law enforcement; it takes the time of
officers to police and relocate homeless camps. Second is healthcare
costs. In the US, when someone comes into a hospital, the hospital
cannot refuse service, even if the patient has no means to pay. These
costs, and others, can amount to $31,000 (or much more) a year PER
homeless person. (Source1
, Source2)
Some people think that individual
cities should be responsible for their homeless populations. However,
cities may not have the right incentives to solve this issue. Take
San Francisco for example. If San Francisco created more housing and
services for homeless people, more homeless people would move to San
Francisco, in essence, helping solve the homeless issue for OTHER
cities, but not necessarily for itself. This is because homelessness
is a transient issue, people can move.
So providing local homeless services
might not solve the homelessness issue, as it may just grow the local
homeless population. Instead, the solution to homelessness might not
involve government, or at least not directly. In Los Angeles, a man
named Elvis Summers created small homes for homeless people (Source).
The homes cost him about $1,200 to create, and included a sturdy
front door, windows, and a solar panel and usb charger. This simple
solution provides a place where people can lock up their belongings
and allows them to go and do other things. Mr. Summers did this out
of the goodness of his heart. That is the reason people do services
for homeless people now, because they are nice people. However, if we
changed this, everything might be different… If entrepreneurs had a
profit incentive to help the homeless and make products tailored for
homeless people, they would.
This is were UBI comes in. It does just
that. UBI gives everyone some purchasing power, which means
entrepreneurs and companies will now have a monetary incentive to
create products that will help homeless people. This could lead to a
major change in homelessness. A simple home like one Mr. Summers
created probably could be built at scale for a fraction of the cost.
These simple homes could be rented to homeless people for perhaps 20
or so dollars a month (which at $600 to build would result in a
return of capital in 30 months, which is really short in the real
estate world). In other words, both an excellent investment and a
life-changing product.
In short, UBI might solve a problem
that is otherwise difficult to solve. Individual cities cannot solve
homelessness on their own, and cities essentially have an incentive
not to solve the problem and pass it on to others. UBI solves this
issue, and solves it in the most efficient way, by putting the free
market to use. It enables for profit entities to do what they do
best, provide services at low cost. So this is just another reason
why UBI is the future.
