Extreme Wealth And Absolute Squalor: Homelessness In Silicon Valley

A homeless man with his belongings in San Jose, CA, the largest city in Silicon Valley. CREDIT: FLICKR/RICHARD MASONER
A homeless man with his belongings in San Jose, CA, the largest city in Silicon Valley. CREDIT: FLICKR/RICHARD MASONER

In Silicon Valley, abundant wealth commonly lives alongside absolute squalor. The same county that houses Yahoo!, Google, and scores of other digital money mines is mired in a costly ongoing failure to address rampant homelessness.

“The dichotomy here is just astonishing,” Destination: Home executive director Jennifer Loving told ThinkProgress. “The richest valley in the nation, if not in many parts of the world, with the fifth-highest rate of homelessness and the number-one rate of unsheltered homeless in the country.”

A new report commissioned by Loving’s group and the Santa Clara County Board of Supervisors details how the valley has failed in its fight against homelessness, and at what cost. All told, county communities spent more than half a billion dollars per year hospitalizing, jailing, and providing social services to about 104,000 individuals who were homeless for some portion of the six-year period of the study. Health care spending ($312 million per year) was the bulk of the cost, with justice system spending second.

The extensive analysis by Economic Roundtable researchers who cross-referenced 25 million separate records offers a clearer understanding of why the county’s costs were so high — and how policymakers could create a financial windfall by giving homeless people houses and direct support services. About 60 percent of all county spending went to just 10 percent of the homeless population, fewer than 3,000 of whom were identified as chronically homeless and in need of more intensive and targeted aid.


Providing permanent housing with supportive services attached for those most-expensive persistently homeless individuals would have saved about $42,700 a head compared to the cost of leaving them to their own devices. That means that even if Santa Clara communities ignored the types of homelessness that afflicted the other 101,000 people in the study and concentrated solely on the persistently homeless, it could have saved $120 million a year. But Destination: Home’s recommendations based on the report go beyond such narrowly-targeted permanent housing work.

Santa Clara County spent nearly $200 million per year on justice system costs involving homeless people. The vast majority was spent jailing people with nowhere to live. Loving suggested the county has avoided the criminalization tack that’s become so popular elsewhere in recent years. But older criminal statutes targeting “vagrants” appear to be common in the area, according to a February review of California municipal codes put out by the law students at the University of California Berkeley.

Just four of the county’s 15 incorporated cities appeared in the sample of towns that the paper analyzed, but they had a combined 33 separate laws on the books criminalizing homelessness. Those numbers are below average for the study, which found 500 such laws in 58 different cities. But the presence of such laws helps explain the disconnect between how the county thinks of itself and a $196 million annual bill for prosecuting and jailing people with nowhere to live.

There’s evidence that minds are already changing on the criminalization question. Palo Alto, the county’s sixth-largest city, decided last year to ditch a 2013 law that outlawed sleeping in cars. Some California cities have pushed hard for such laws by resisting a “Right to Rest” bill that would protect homeless people from many forms of police interference. Palo Alto’s quick reversal under pressure might indicate present-day attitudes have broken from the past inclination to criminalize homelessness in the county.

“Generally, we’re lucky we live in a progressive community,” Loving said. “I’d say most people are not only sympathetic but understand the solutions to homelessness. But the average community person cannot change the situation, and there’s a weariness about the number of people who are on the street and about encampments.” Tent cities are common in the area, and San Jose police drew national headlines when they cleared a particularly large one known as The Jungle in early winter 2014. Such camps make people uncomfortable, Loving said, “but there’s not that viciousness you see in some communities toward the homeless. We all get how expensive it is to be here. Everyone struggles to pay their rent.”


High rent is a headache for entrepreneurs and young tech investors, but it’s devastating to the economically vulnerable at whom federal rental assistance dollars are aimed. A Section 8 voucher doesn’t go as far in Silicon Valley as it might elsewhere, and federal resources for both rent subsidies and new housing construction have dried up in recent years. Destination: Home supports State Assembly Speaker Toni Atkins’ (D) effort to create a dedicated revenue stream for a state housing trust fund that would help patch the resource gap created by federal lawmakers and Gov. Jerry Brown (D).

But even when the financial resources are there, real estate dynamics in the valley have a way of stymying progress. Often, Loving said, the land simply isn’t available for lawmakers to build housing and services facilities in an ideal way.

Developing those facilities outside of existing communities risks isolating the people being served and undermining some of the benefits of proven strategies for re-incorporating the homeless, the National Law Center on Homeless and Poverty’s Eric Tars told ThinkProgress. “The best models are where different income groupings are integrated into common communities with common access to basic services and special access to additional services for those who are in particularly deep need,” he said.

Loving doesn’t want the Santa Clara County report to be used to justify creating the right kinds of facilities in the wrong, isolated way. “When we talk about the high-cost users it ends up sounding a little colder than I think we mean,” she said. “Really we’re talking about serving the people who are suffering the most.”

“It will take a lot of political will to get those sort of things sited,” said Tars. “But there’s a lot of evidence that shows that a lot of the Not-In-My-Back-Yard concerns aren’t actually borne out in practice.” Indeed, decades of research dating back to the 1970s indicate that neighborhood property values benefit from the presence of something like a halfway house. “This is another area where if we can get beyond the myths it can help us find the political will to make these things happen that are in fact win-wins for both individuals and communities,” Tars said.

Focusing on the highest-need sliver of the unsheltered doesn’t need to come at the expense of neglecting the 100,000 other people who experienced homelessness in the county during the study window, or of ghettoizing the more intensive wraparound services and housing facilities that the chronically homeless need to rebound. The policies that would benefit the bulk of that population don’t require the same kind of physical resources, Loving said, pointing out that more than half the people in the study were homeless for six months or less in the six years the researchers analyzed.


“What that tells us is they didn’t need to ever be homeless at all. So we need to invest in intervention,” Loving said. “So what is that? Is it rent for a month? Help getting a job? Whatever that is, how do we have a more robust intervention response that prevents people from ever getting homeless?”

The report’s comprehensive view of homelessness in the area provides ample motivation to find answers to those questions. And the relative prosperity of so many citizens of the global technology womb underscores that imperative.

“Around here we buy and sell apps for more than what it would cost to end homelessness, apps that take pictures,” Loving said. “It’s a matter of will.”