Here’s a mystery for you: why the hell isn’t homelessness solved yet?

I grew up on the West Coast and I thought everybody had this problem, but the more I’ve traveled, the more I’ve seen something puzzling - it’s just us.

Other places have homeless people, but it’s just not the same quality or quantity. You can travel to any other first world city in the world, and hardly ever see somebody visibly homeless, then come back and be kicked in the heart with such overt suffering and awfulness.

Why are we failing at something that everybody else seems to be doing better at?

Or, more optimistically - if everybody else is doing better, that means it is solvable, and what are they doing that we can copy?

In this post I’ll:

1. Diagnose the problem.

2. Propose a concrete solution, including how to get it past the people who’ve been blocking the necessary reforms.

If you already agree on the diagnosis, I recommend skipping to the solution section (ctrl-f “The key idea”).

How to not de-rail the homelessness conversation

The two most common ways the conversation gets de-railed are:

1. Some people are trying to help the homeless. Some people are trying to fix the problem of finding visible homelessness unsightly and scary. I am only trying to help the homeless themselves in this post.

2. Some people are just trying to solve homelessness specifically. Some people are trying to help the homeless get back to a relatively normal level of welfare, which means not just fixing their homelessness, but also their mental illness, addiction, employment, abusive family, etc. I am going to focus only on solving homelessness. Solving everything else is for another post or 20,000.

This isn’t to say I don’t care about those other problems. However, I am but a humble writer. I think I can simply solve homelessness in a blog post.

Also, this post will focus on SF and California, but much of it cross-applies to the whole West Coast of North America, including British Columbia.

Housing costs determine how many people become homeless. Drugs and mental health determine who becomes homeless

Want to help one specific person? Treat what went wrong for them.

Want fewer homeless people overall? Build more housing.

Both matter.

They're just answers to different questions.

Think of it like a game of musical chairs with 10 people and 9 chairs, where housing are the chairs.

You can give the slow kid sprinting lessons.

There are still nine chairs.

Somebody has to lose the game. It will probably be the slower kid (the person with disabilities or drug addictions).

If you ask the kid why they’re chairless, they’ll say it’s because they’re slower than the other kids. Which is true.

But it’s the proximate cause.

The structural, distal cause is that there are not enough chairs.

“But surely, Kat, some homeless people are just too messed up to afford housing, no matter how cheap we make it?”

Yes, you’re right. Some of the homeless people are not part of the market, they are unemployable, so the market cannot fix their problems.

This leads to an important distinction between the types of homeless people. ~80% of the homeless in SF are temporarily homeless. They will likely only be homeless once in their life, for a relatively brief period of time, then they’ll pull themselves back onto the rungs of society.

It’s easier for them to pull themselves out when there’s low rent and high vacancy rates, so lowering housing costs helps this group.

Cheap housing also does something sneakier: it shrinks the future chronic population. Nobody starts out chronically homeless. You become chronic by staying homeless: you lose your ID, the couches run out, the untreated illnesses compound, and you're sleeping next to fentanyl every night (exposure is a massive cause of addiction). The faster people bounce back onto the ladder, the fewer of them ever harden into the group that needs the expensive solution.

For the chronically homeless, who are in it for the long term and potentially for life, we need a different solution. The solution is permanent supportive housing (PSH). It’s a room of their own, provided by the government, either via vouchers or directly, where the building itself concentrates a bunch of services to treat the common problems, such as drug addiction and schizophrenia.

This works. As Scott Alexander puts it, the evidence that giving people housing makes them housed is overwhelming. (The evidence that it fixes the addiction or mental illness underneath is much weaker. Which is fine. Because in this article we’re only solving the homelessness problem.)

Why hasn’t SF already done this?

Trick question: they have!

Just not nearly enough.

Because you know how hard it is to build buildings in SF? You know how hard it is to even turn an abandoned building into a innocent and beloved ice cream shop? Now imagine trying to build a house for the worst off homeless people, the ones with the most disruptive and probably permanent problems?

SF already runs one of the biggest supportive housing systems in America: roughly 16,000 units, more per capita than almost any city. And it's still losing. Because building a new unit of PSH in SF costs $600,000 to $1 million.

Compare that to Finland, which just converted its shelters into apartments (2,121 shelter beds in 1985, 52 by 2016) and cut homelessness roughly 80% since the 1980s.

Or Houston, which houses people for about $18,000 a year each, and cut homelessness 63%. Not because Houston is generous. It spends less on the homeless than almost any major city. Houston can afford to house people because Houston has cheap apartments to put them in.

Which then leads us to the question:

Why is SF housing so damn expensive? Vetoes, zoning, and entrenched interests, oh my!

Housing costs are a simple matter of supply and demand. If demand is high, that will push costs up. Which usually leads to supply providing more, which will drive the costs down again.

Unless supply is blocked.

Which is what happens in SF and a lot of expensive cities.

“But Kat, SF isn't expensive because of supply. It's expensive because it's full of rich people bidding up prices." Half true! Demand here is enormous. But demand is enormous in Tokyo and Dallas too, and they're cheap, because when demand rises there, they build, and the demand shows up as new apartments. When demand rises in SF, the demand shows up as price, because the number of homes barely moves. Same demand, opposite outcomes.

And notice which half of the equation you'd actually want to change: the only way to lower demand is to make SF a worse place to live.

Supply is the only lever that doesn't involve sabotaging your own city.

In SF it’s not uncommon for it to take 3 years just to get the permission to build. Let alone actually building the thing.

Compare this to Houston at about two weeks. Or Calgary at four to five months.

So what’s going on? Isn’t SF full of builders? Why is a city full of builders so bad at building actual buildings?

The proximate cause of SF sucking at building buildings is vetoes

Imagine you are a developer trying to build a building in SF. You check to make sure that your building meets the stated laws. It does. You submit some extensive forms and wait 3 months for review. A neighbor says that they’re worried about a shadow. It’s scheduled for them to discuss this 14 months from now.

Honestly, I could keep going, but writing it was giving me flashbacks to the worst bureaucracy I’ve ever experienced (registering a charity in India) and I don’t want to inflict that on myself or anybody else. Kafka bureaucracy stories are horrific and boring to experience and read about. If you want some concrete micro-stories Claude wrote to get a sense, check out here.

Suffice to say it’s a series of vetoes, where even if everybody on the block is fine with the building, a single no can stop or slow down the whole thing. The biggest ones are:

• Discretionary review, as compared to ministerial review. Ministerial review is how most of the world does it, where if you follow the law, you by default get approved by an administrator. Discretionary review means it’s up to the discretion of the administrators and even your neighbors. Instead of clear rules, you get vibes.

• CEQA approval. It’s meant to be an environmental law, but people were given a veto lever, and they started using for everything under the sun. Don’t give people a stop-everything button. Some people will press it.

• There’s a 5 department relay that takes ~600 days to go through. If nothing goes wrong. Something always goes wrong. Each department gets an opportunity to slow you down.

It’s important to say that this is not democratic. It’s not that if the majority of people on a block don’t want something, it doesn’t happen. It’s if anybody says no.

Most insanely - you could be following all of the rules and this will still happen. It’s up to the discretion of a bajillion people.

It would be like a group dinner where the restaurant choice needs unanimous approval. One person's vegan, one’s a carnivore, one hates Italian, one's gluten-free. You probably just . . . won’t eat. And in SF you probably just . . . won’t build.

This is different than how most of the world works. Most of the world does zoning where by default you’re allowed to build as long as you are following the local rules. You check the rules, fill out a form, an administrator checks you are indeed following the rules, gives it a stamp, and you’re ready to go.

Most places take a few weeks to a few months to get permission to build. SF takes an average of 523 days just for planning approval, then another 605 days to issue the building permit for the already-approved project - about three years.

It’s the difference between a vending machine and an interview. If you have enough money, a vending machine will simply give you what you pay for. The vending machine doesn’t question whether you’re worthy of a snack. An interview is up to the discretion of the interviewer and is opaque and even if you look great on paper, you can be rejected for any reason.

But it’s not all bad news! The state has actually spent the last few years dismantling most of this machine. Since 2024, under a law called SB 423, any SF apartment project that follows the zoning rules gets approved ministerially in three to six months. No discretionary hearings, no Board of Supervisors. In 2025 the state gutted CEQA for infill housing too, and put shot clocks on the five-department relay. For the kind of building that follows the rules, the vending machine is finally installed.

So SF is booming now, right?

. . . Right?

More than 8,000 units sit fully approved, permits in hand. . . but nothing’s being built.

Because two other blockers are still standing.

Which brings us to the fees.

SF made it unprofitable to build buildings

Builders aren’t building because according to the city’s own calculations, exactions have simply made it unprofitable to build.

What are exactions? They’re basically “you can build here, but you must include X% of your units below market rates / pay some of SF's twenty-plus separate impact fees (transit, schools, parks, childcare) / pay union-level wages / upgrade the sidewalk while you're at it / etc."

Exactions are not bad in and of themselves. They’re like taxes. Taxes broadly help provide public goods that the market wouldn’t provide on its own. But just like taxes, exactions can get too high, and then people stop working, just leave, or lead a revolution. Developers aren’t usually your revolutionary types, so they usually just don’t build or switch jobs. That's why today SF technically could have more than 8,000 units built - they're fully approved, entitlements in hand - but nobody has signed up to build them. They'd lose money.

To be fair, the city has noticed. In 2023 it cut its inclusionary percentage by roughly a third, cut impact fees by a third, and let developers defer 80% of fees until opening. Still not enough. The city's own most recent study found that even at zero inclusionary, buildings don't pencil.

This needs to be fixed on top of removing the vetoes before we can expect housing supply to increase, thus leading to a lowering of costs.

SF made it illegal to build dense housing

SF decided it wasn’t enough to make it unprofitable and painfully slow to build. They also outlawed the type of housing most people need.

Do you want to work in SF? Well, you have to commute every day. But all of the areas with a reasonable commute have already become single family homes. The only way to fit more people within a reasonable commute from work, you need to build up. You need apartments.

So of course, SF zoned about two-thirds of its residential land for single-family houses only, and capped most of the rest of the city at 40 feet.

This means that even if you take 3 years to get permission to build, you still cannot build enough on the lot to make a dent in the supply.

Why would they do something so silly?

Enter stage left:

There’s an organized group who doesn’t want things to change. They like things this way

Remember the loveable old man in Up (Carl)? Who refuses to move while the evil developers destroy his neighborhood?

This is the person who is blocking building in SF.

I like using Carl as an example because it’s great for empathy.

Carl is not a bad person. And he’s not wrong in some ways. His house is more beautiful than those large soulless skyscrapers.

Not to mention he loved his home and the neighborhood. It’s not simply replaceable with another home and neighborhood. He is losing something important and real if his neighborhood changes.

It also shows what can happen if you go too far in the other direction, where you give developers all the power. It’s what happens in China when they simply kick out people who’ve lived there for generations to build something shiny and new.

If Carl lived in SF, he wouldn’t have to face this. He would simply have vetoed the building next to his house, and it would have stayed the same.

Except, of course, then it would lead to massive rents, leading to mass homelessness, and programmers having to live in bunkbeds in a bedroom of 8 people. It shows the single identifiable victim instead of the diffuse victims.

And here’s the kicker - the victims can’t vote on this. Zoning is done at the city level in SF, and largely at the neighborhood level in practice, since supervisors answer to tiny districts, so the people who'd most benefit from cheaper housing don't live there yet and can't vote on it.

This is unlike in most other parts of the world where zoning is done by a body a level up, so people can vote on it who don’t already live in the affected neighborhoods.

This is why it’s best to do the proposed laws at the state level. Then the people who are affected can vote for this. A neighborhood of Carls will never vote for change.

But it’s important to sit with our empathy for Carl for a moment. We really don’t want to become the soulless developers who steamroll over him.

The key idea: give people the ability to opt-out. Respect autonomy while still changing the default option to yes.

Let people, at a block level, opt out of the specific thing they really care about.

If you can get the majority of people on your block to vote to opt out, you’re all good.

I love this because it does two things at once:

• It takes down the main motivation of the opposition group. The people who keep blocking this for everybody else will be fine if they can opt out. They don’t care about other neighborhoods changing. They just care about their own.

• It actually respects their values and avoids being authoritarian. I’m not a libertarian by any stretch, but I hate it when people force me to do something. I don’t want to do that to somebody else unless it’s a really extreme circumstance. High housing costs is not an extreme circumstance. This helps us avoid going to the other extreme, of just bulldozing the opposition.

I got this idea from Houston. Houston is the poster child of affordable housing in a high demand city. Part of the way they got to this situation is they allowed this block level opt out system.

About 16% of them opted out. Meaning 84% didn't.

It’s an open question how many people would opt-out in SF. It could be higher than Houston. That doesn’t matter unless it gets pretty crazy (which is quite unlikely). If even 50% of SF opted out, going from 0% of SF can build to 50% can would be insane for rental costs.

It might make sense to make an exception for housing next to public transit hubs, since that’s so particularly important for providing housing to the poorer people. But that’s for the legal folks to figure out.

The general thing is we’re not here to bully. If you really care and enough people on your block do too, you can opt out of all of this.

It just changes the default. Before the default was that nobody can build unless you get everybody on board. Now the default will be that people can build, unless the majority of your block is against it.

But hasn’t this already been tried and it didn’t work?

You've already seen this play out. Remember the vending machine nobody used? The state spent years removing the process vetoes (see appendix), and production didn't budge, because the exactions and zoning blockers were still standing. Every partial reform 'fails' this way, and every failure becomes ammunition for people who say reform doesn't work.

The problem with blockers is that if you get rid of one, you still have all of the other ones.

You need to get rid of all of them.

This is an example of the Law of the Minimum. This is a fancy way of saying “you can only go as fast as your limiting factor.” It’s like getting your family out of the house. If you’ve got everybody in the car, but there’s one lolligagger still in bed, you’re not going anywhere.

The problem with SF housing is that if you get everything right but you miss something along the chain, it all breaks. That doesn’t mean it’s impossible. It just means that it’s hard and you shouldn’t expect much in the way of changes until you get all the pieces.

How to stop the game of whack-a-mole: police outputs, not inputs

The problem with almost all legal reform here is that you are not playing against a static opposition. If you pass one law, they’ll find a workaround.

But there’s a solution to this: legislate outcomes, not process.

Pass a law at the state level saying:

1. Cities must permit at least X units per year.

2. If you do so, you get to keep your local zoning rules.

3. If you fail to do so, you automatically switch to the state mandated zoning system, which is by-right building (the vending machine model), being able to build up, anything not approved within X days gets approved by default, fees capped, etc.

Right now with most legislation, they’re rewarded for coming up with ways to delay building or come up with different ways to block it. But in this model, that would be self-defeating. If they come up with a way to delay building, then the law will detect this and switch them to a zoning that they hate even more.

It doesn’t matter the workaround they find - it’ll get noticed in the outcome metrics.

This has actually already been tried with great success in the civil rights fight.

For 70 years, Congress kept trying to legislate away the Jim Crow tricks.

They banned the grandfather clause, so they introduced literacy tests. Congress banned those, and then they introduced “understanding clauses”. Black voter registration stayed at 7%.

Then in 1965, Congress changed to measuring the outputs, not the inputs: any county that had less than 50% registration would lose control of their own election process.

Finally, registration went to 60%.

Cross-apply this to housing. Stop legislating individual zoning rules. Legislate the outputs.

What about the homeless who refuse shelter?

What if we build all of this housing, fast and cheaply, and then they refuse to live there?

You might have heard that a lot of the homeless could be in a shelter but refuse. This is true, but irrelevant.

Temporary shelters are but a stop gap for helping the homeless. And they kinda suck. You might refuse them too.

• They split it by gender, so if you have a partner, you can’t be with them.

• They’re crawling with diseases.

• You don’t even necessarily get that much better of a sleep because you’re in giant open rooms with tons of people snoring, coughing, and having psychotic episodes around you.

• Crime and assault are common.

• You have to wait in line for ages.

• You can’t store anything there and you have to leave in the morning, so you’re still on the streets most of the time

In a word, it’s not really housing.

The generally accepted solution to actually providing housing to the homeless is to give them what’s called Permanent Supportive Housing (PSH). PSH is where you get a small room of one’s own, with your own key. In the fancier ones you get your own kitchen and bathroom. In the more frugal ones, you share the bathroom and kitchen with a few other people.

But you’ve got a door with a lock. You’ve got your own room where you can store your stuff in the day, including just staying inside if you want to. No need to spend your days on the streets or in libraries.

The “supportive” part of PSH is that then usually this is where a whole bunch of supportive services are concentrated, such as programs to help you quit an addiction or get your meds, etc.

The stats you’ve heard about how a decent chunk of the homeless refuse shelter is about them refusing shelters.

Not PSH.

PSH is different.

When researchers ran the hardest version of the experiment - a randomized trial offering permanent supportive housing to the most impaired chronically homeless people in Santa Clara County, people averaging five hospitalizations and three jail stays in the prior two years - the vast majority moved in and stayed housed. People don't refuse housing. They refuse shelters.

Also, while we’re on the subject of PSH - the bulk of the ability to build enough of these will be making the city by-right. However, there’s also a good ~50% increase in costs of building if the government funds it compared to only private funding. This is largely driven by union-wage mandates, gold-plated design requirements, and the multi-year scramble to assemble a dozen funding sources. This is another lever to pull on, though lower priority than simply making it easier in general to build in SF.

In conclusion: please spread this so the right people read this and implement it

I am not a politician or an organizer. I hate coordinating with my friends to choose a restaurant, let alone trying to wade into politics. But it will take politics and organizing to get this to actually happen.

Please like and share this with anybody you know who’s an organizer, a politician, etc. (Specifically Scott Wiener if you can. He seems to share a similar view on the problem and has already been doing great work in the area.)

There are so many people who care about the homeless, whether out of compassion or self-interest. There are so many people who care about affordable housing for altruistic and personal preferences. This is a thing we can solve. Most of the world already has. Just because it’s complex and requires a lot of things to go right doesn’t mean it can’t work. Electricity supply is wildly complex and we manage it fine.

We can make the changes while respecting the dignity of both the homeless and the Carls.

Let’s make this world a little bit better here. We can do it.