UBI the solution to homelessness

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.